Associated British Foods (ASBFY) AI Stock Analysis

Compare

44 Followers

Top Page

Associated British Foods

(OTC:ASBFY)

Select Model

Neutral 66 (OpenAI - 5.2)

Rating:66Neutral

Price Target:

$28.00

▼(-0.36% Downside)

Action:DowngradedDate:01/04/26

The score is primarily driven by steady but cooling fundamentals: a strong balance sheet is offset by weaker 2025 profitability and notably poorer free-cash-flow conversion. Technicals are mildly supportive (price above key moving averages and positive MACD) but with stretched short-term momentum signals. Valuation is reasonable with a moderate P/E and dividend yield, while earnings-call takeaways are cautious due to profit pressure (especially sugar) despite shareholder returns and 2026 growth guidance.

Positive Factors

Diversified multi-segment model

ABF's exposure across Grocery, Ingredients, Sugar, Agriculture and Primark spreads revenue and commodity risk. This diversification smooths cash flows across cycles, allows cross-segment reinvestment, and reduces reliance on any single end market for durable revenue stability.

Conservative balance sheet

Low and stable leverage provides financial flexibility to fund capex, expansion and shareholder returns during downturns. A conservative balance sheet supports investment in Primark expansion and ingredient capacity without needing disruptive external financing, reducing long-term risk.

Ingredients segment profitability

Strong, double-digit adjusted profit growth in Ingredients reflects structural competitiveness: productivity gains, customer sticky B2B demand, and higher-margin specialty products. This segment can drive durable earnings resilience and offset retail or commodity volatility over the medium term.

Negative Factors

Weakened free cash flow conversion

A sharp drop in free cash flow and low coverage of net income point to working-capital swings or higher capex reducing cash conversion. Persistently weaker FCF limits self-funded growth, raises reliance on debt or asset sales, and pressures sustainable dividends and buybacks over time.

Sugar segment volatility

Sugar's swing to loss reflects exposure to volatile commodity prices, crop yields and input costs. As a cyclical, regulated and agriculturally-dependent business, recurring sugar underperformance can erode group profitability and increase earnings volatility across planning horizons.

Softening profitability and revenue momentum

A decline in revenue and double-digit adjusted profit drop indicate margin compression and weaker operating leverage. Persistent pressure on gross and net margins suggests challenges passing through input cost inflation and softer demand, reducing durable earnings power absent structural improvement.

Associated British Foods (ASBFY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$18.76B

Dividend Yield2.66%

Average Volume (3M)50.76K

Price to Earnings (P/E)14.4

Beta (1Y)0.35

Revenue Growth1.55%

EPS Growth17.02%

CountryUS

Employees138,000

SectorConsumer Defensive

Sector Strength42

IndustryPackaged Foods

Share Statistics

EPS (TTM)1.25

Shares Outstanding709,638,600

10 Day Avg. Volume16,268

30 Day Avg. Volume50,762

Financial Highlights & Ratios

PEG Ratio-0.56

Price to Book (P/B)1.45

Price to Sales (P/S)0.82

P/FCF Ratio16.09

Enterprise Value/Market Cap0.88

Enterprise Value/Revenue0.85

Enterprise Value/Gross Profit3.56

Enterprise Value/Ebitda6.25

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

EPS Forecast (FY)2.19

Revenue Forecast (FY)$26.37B

Associated British Foods Business Overview & Revenue Model

Company DescriptionAssociated British Foods plc operates as a diversified food, ingredients, and retail company worldwide. It operates through five segments: Grocery, Sugar, Agriculture, Ingredients, and Retail. The Grocery segment manufactures and sells grocery products, including hot beverages, sugar and sweeteners, vegetable oils, balsamic vinegars, bread and baked goods, cereals, ethnic foods, and meat products to retail, wholesale, and foodservice businesses. The Sugar segment is involved in growing, processing, and selling sugar beet and sugar cane to industrial users. The Agriculture segment manufactures and sells animal feeds; and provides other products and services for the agriculture sector. The Ingredients segment manufactures bakers' yeast, bakery ingredients, enzymes, lipids, yeast extracts, and cereal specialties. The Retail segment is involved in buying and merchandising clothing and accessories through the Primark and Penneys retail chains, which offer womenswear, menswear, children's wear, footwear, accessories, homeware, and skincare products. The company was founded in 1935 and is headquartered in London, the United Kingdom. Associated British Foods plc is a subsidiary of Wittington Investments Limited.

How the Company Makes MoneyAssociated British Foods generates revenue through multiple streams across its diverse sectors. The Grocery division, which includes well-known brands like Twinings, Ovaltine, and Silver Spoon, contributes significantly to the company's earnings through the sale of packaged food products. The Sugar division, one of the largest sugar producers in Europe, earns revenue from the production and sale of sugar and related products. The Agriculture segment generates income through the production of animal feed and other agricultural products. The Ingredients division specializes in the supply of functional food ingredients, generating revenue from food manufacturers. Notably, Primark, the company's retail arm, is a key revenue driver, known for offering low-cost fashion apparel, attracting a large customer base. ASBFY also benefits from strategic partnerships and economies of scale, enhancing its operational efficiency and profitability. Overall, the company's diversified portfolio and strong brand presence across multiple sectors contribute to its financial performance.

Associated British Foods Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Shows how much each business unit contributes to overall sales, highlighting areas of strength and potential growth or risk within the company's diverse operations.

Chart InsightsAssociated British Foods' Retail segment has shown robust growth, indicating strong consumer demand and effective retail strategies. The Sugar segment also experienced significant revenue increases, suggesting favorable market conditions or pricing strategies. However, the Agriculture segment is facing a downward trend, which could signal challenges in that area. Overall, the company's diversified portfolio seems to be balancing out sector-specific fluctuations, with Retail and Sugar providing a solid foundation for revenue growth.

Data provided by:

The Fly

Associated British Foods Earnings Call Summary

Earnings Call Date:Nov 04, 2025

(Q4-2025)

% Change Since: |

Next Earnings Date:Apr 28, 2026

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture, with strategic investments and growth initiatives in Primark and the Ingredients segment highlighting positive aspects. However, significant challenges in the Sugar segment and a decline in overall group revenue and profit indicate financial difficulties. The consumer environment remains challenging, impacting Primark's sales performance. While ABF is taking steps to address these issues, the balance of highlights and lowlights suggests a cautious outlook.

Q4-2025 Updates

Positive Updates

New Share Buyback Program

ABF announced a new share buyback program of GBP 250 million to be completed in 2026, demonstrating confidence in future growth.

Investment in Growth and Innovation

ABF invested GBP 1.2 billion across Primark and food businesses, focusing on technology, automation, and expansion, indicating a strong commitment to long-term growth.

Primark's Expansion and Digital Initiatives

Primark opened 23 new stores in Europe and the U.S., launched a new store design concept, and rolled out Click & Collect service to all British stores, showcasing strategic growth and digital integration.

Strong Performance in Ingredients Segment

Ingredients segment saw a 16% growth in adjusted operating profit at constant currency, driven by productivity savings and effective cost management.

Positive Momentum in Grocery Brands

Twinings and Ovaltine delivered good sales growth, supported by marketing and product innovation, highlighting the strength of ABF's international brands.

Negative Updates

Decline in Group Revenue and Profit

Group revenue decreased by 1% and adjusted operating profit fell by 12% at constant currency, primarily due to a significant drop in sugar profits.

Challenges in Sugar Segment

Sugar segment faced an adjusted operating loss of GBP 2 million due to low European sugar prices and high beet costs, contributing to overall financial challenges.

Weak Consumer Environment Impacting Primark

Primark experienced a 2.3% decline in like-for-like sales due to a weak consumer environment in the UK and Europe, affecting overall performance.

Closure of Vivergo Bioethanol Plant

ABF closed the Vivergo bioethanol plant in the UK due to regulatory challenges and continued losses, illustrating difficulties in certain operations.

Agricultural Profit Decline

Agricultural profit decreased from GBP 41 million in 2024 to GBP 25 million in 2025, impacted by exceptional weather conditions and one-off costs.

Company Guidance

During the call, ABF provided guidance on several key financial metrics and strategic initiatives. For the fiscal year ending September 13, 2025, the group's sales decreased by 1%, while adjusted operating profit fell by 12%, primarily due to a decline in sugar profits from close to GBP 200 million in 2024 to breakeven in 2025. Despite these challenges, ABF maintained its interim and final dividends in line with the previous year and announced a new GBP 250 million buyback program to be completed in 2026. The company invested GBP 1.2 billion in capital across Primark and its food businesses, with a focus on long-term growth and cash generation. Additionally, Primark's sales grew by 1% to GBP 9.5 billion, although like-for-like sales declined by 2.3%. The group expects to deliver growth in adjusted operating profit and adjusted EPS for 2026, with Primark anticipating a subdued consumer environment but focusing on initiatives to strengthen its value proposition. Sugar profits are expected to improve slightly, while grocery and ingredients profit levels are anticipated to remain stable.

Associated British Foods Financial Statement Overview

Summary

Fundamentals are resilient with a conservative balance sheet (Balance Sheet Score 78; stable low leverage), but profitability softened from 2024 to 2025 (Income Statement Score 67) and free-cash-flow conversion deteriorated materially in 2025 (Cash Flow Score 58), which tempers overall quality.

Income Statement

Positive

Revenue has expanded meaningfully since 2020, but momentum cooled recently with a slight decline in 2025 after modest growth in 2024. Profitability is solid for the category (2025 gross margin ~24% and net margin ~5%), but earnings power has softened versus 2024 as operating and net margins stepped down, indicating some cost/price mix pressure and less operating leverage year over year.

Balance Sheet

Positive

Leverage looks conservative and stable, with debt-to-equity consistently around ~0.33 and equity remaining sizable relative to assets. Returns to shareholders are positive but not consistently strong—return on equity peaked in 2024 (~13%) and fell back in 2025 (~9%), suggesting profitability volatility rather than balance-sheet strain.

Cash Flow

Neutral

Cash generation is positive, but quality and conversion weakened in 2025: free cash flow fell sharply (down ~27%) and free cash flow covered less than half of net income (~0.45x). Operating cash flow remains healthy in absolute terms, yet cash flow coverage metrics improved in 2024 and then deteriorated in 2025, pointing to working-capital swings or higher cash outlays reducing cash conversion.

Breakdown	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	19.46B	20.07B	19.75B	17.00B	13.88B
Gross Profit	4.66B	4.88B	4.16B	3.78B	3.13B
EBITDA	2.65B	3.13B	2.48B	2.13B	1.80B
Net Income	1.02B	1.46B	1.04B	700.00M	478.00M
Balance Sheet
Total Assets	19.29B	19.01B	18.84B	19.77B	16.89B
Cash, Cash Equivalents and Short-Term Investments	1.06B	1.66B	1.46B	2.13B	2.31B
Total Debt	3.69B	3.68B	3.72B	3.89B	3.69B
Total Liabilities	8.11B	7.74B	7.65B	8.22B	6.89B
Stockholders Equity	11.06B	11.19B	11.09B	11.45B	9.92B
Cash Flow
Free Cash Flow	997.00M	1.69B	581.00M	384.00M	786.00M
Operating Cash Flow	2.23B	2.87B	1.65B	1.15B	1.41B
Investing Cash Flow	-721.00M	-1.33B	-906.00M	-744.00M	-561.00M
Financing Cash Flow	-1.79B	-1.57B	-1.28B	-677.00M	-512.00M

Associated British Foods Technical Analysis

Technical Analysis Sentiment

Positive

Last Price28.10

Price Trends

50DMA

26.75

Negative

100DMA

27.56

Negative

200DMA

27.83

Negative

Market Momentum

MACD

<0.01

Negative

RSI

51.95

Neutral

STOCH

37.26

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ASBFY, the sentiment is Positive. The current price of 28.1 is above the 20-day moving average (MA) of 26.43, above the 50-day MA of 26.75, and above the 200-day MA of 27.83, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 51.95 is Neutral, neither overbought nor oversold. The STOCH value of 37.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ASBFY.

Associated British Foods Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GIS	68 Neutral	$24.13B	9.77	27.29%	5.19%	-5.65%	0.41%
HRL	68 Neutral	$14.08B	28.81	6.13%	4.82%	1.55%	-40.81%
ASBFY	66 Neutral	$18.76B	14.38	8.97%	2.66%	1.55%	17.02%
JBS	66 Neutral	$18.05B	11.11	24.20%	9.72%	―	119.48%
MKC	65 Neutral	$19.07B	24.24	14.32%	2.61%	1.64%	-1.83%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
KHC	54 Neutral	$29.13B	-4.98	-12.87%	6.75%	-3.70%	-431.05%

* Consumer Defensive Sector Average

Performance Comparison

ASBFY

Associated British Foods

26.58

3.11

13.28%

GIS

General Mills

45.23

-13.88

-23.48%

HRL

Hormel Foods

25.60

-2.60

-9.23%

MKC

McCormick & Company

71.04

-11.53

-13.96%

KHC

Kraft Heinz

24.61

-4.94

-16.72%

JBS

16.89

6.73

66.24%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jan 04, 2026