Proactive Investors
26 May 2026, 12:41 UTC · 2h ago
AB Foods likely to remain friendless until Primark can be turned around, says Deutsche Bank
Source · https://www.proactiveinvestors.co.uk/companies/news/1092880
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Proactive Investors
26 May 2026, 12:41 UTC · 2h ago
Source · https://www.proactiveinvestors.co.uk/companies/news/1092880
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Story key points
4 claims · impact-rated
Deutsche Bank cut its target price for Associated British Foods (ABF) from 1,925p to 1,850p and reduced EPS forecasts for FY2026 by 5% and FY2027 by 7%. — A target price cut combined with reduced earnings forecasts from a major investment bank typically triggers immediate downward pressure on the stock.
-0.60Primark is experiencing weak like-for-like sales growth and potential gross margin pressure due to cost inflation that cannot be fully passed to consumers. — Slowing sales and margin compression at the group's primary retail arm directly threaten the overall profitability of ABF.
-0.50Deutsche Bank suggests a Primark demerger is unlikely to occur until like-for-like sales improve. — This removes a potential catalyst for value unlocking that investors often look for in conglomerates.
-0.30Lower sugar prices are making Associated British Foods' European sugar businesses an unattractive proposition. — Commodity price headwinds in the sugar division add another layer of risk to the group's diversified earnings.
-0.20Impact vectors
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Model heads
Deutsche Bank cut the target price and warned of earnings downgrades due to weak Primark sales and margin pressures.
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