Associated British Foods (ASBFY) AI Stock Analysis

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Associated British Foods

(OTC:ASBFY)

Rating:79Outperform

Price Target:

$32.00

▲(9.10%Upside)

Associated British Foods achieves a strong overall stock score, driven primarily by its robust financial performance and solid valuation metrics. The positive technical indicators further enhance the stock's attractiveness, making it a promising option for investors. Continued focus on managing debt and sustaining growth will support long-term success.

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

Market Cap

$20.89B

Dividend Yield1.89%

Average Volume (3M)755.00

Price to Earnings (P/E)12.9

Beta (1Y)0.47

Revenue Growth1.55%

EPS Growth17.02%

CountryUS

Employees138,000

SectorConsumer Defensive

Sector Strength59

IndustryPackaged Foods

Share Statistics

EPS (TTM)2.27

Shares Outstanding717,990,970

10 Day Avg. Volume0

30 Day Avg. Volume755

Financial Highlights & Ratios

PEG Ratio0.39

Price to Book (P/B)1.30

Price to Sales (P/S)0.00

P/FCF Ratio8.05

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$32.00

Price Target Upside9.10% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering0

Associated British Foods Business Overview & Revenue Model

Company DescriptionAssociated British Foods (ASBFY) is a diversified international food, ingredients, and retail group. The company operates through five main segments: Grocery, Sugar, Agriculture, Ingredients, and Retail. Its Grocery division includes the production of well-known brands in categories such as breakfast cereals, tea, and baked goods. The Sugar segment focuses on sugar production and processing. The Agriculture division provides animal feed and other agricultural services. Ingredients cover yeast and bakery ingredients production, while the Retail division is known for its Primark fashion retail chain, offering apparel and accessories at affordable prices.

How the Company Makes MoneyAssociated British Foods generates revenue through its diversified operations across various sectors. The Grocery segment earns money by manufacturing and selling branded food products to retailers and consumers. The Sugar segment derives revenue from the cultivation, processing, and sale of sugar and related products. The Agriculture division provides products and services to the farming industry, including animal feed and crop inputs, generating income through sales to agricultural businesses. The Ingredients segment makes money by supplying specialty ingredients like yeast and bakery products to food manufacturers. Primark, ASBFY's Retail division, contributes significantly to the company's earnings by selling fashion and apparel products directly to consumers in stores across Europe and the United States. The company's diverse portfolio and broad geographical presence help mitigate risks and drive consistent revenue growth.

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:

Main Street Data

Associated British Foods Earnings Call Summary

Earnings Call Date:Nov 05, 2024

(Q4-2024)

% Change Since: -1.38%|

Next Earnings Date:Apr 29, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant growth and profitability across multiple segments, with substantial investments supporting future growth and shareholder returns. However, challenges in the Sugar division and specific markets like Germany and China were noted, presenting areas of concern.

Q4-2024 Updates

Positive Updates

Substantial Improvement in Profitability

Operating profit increased by 38%, and adjusted earnings per share rose by 39%. Cash generation also saw a significant increase to GBP1.4 billion, an increase of GBP1.1 billion from the previous year.

Strong Performance Across Segments

Revenue grew 4% on a constant currency basis to GBP20.1 billion, with notable performance in Retail, Grocery, Ingredients, and Sugar. Retail operating margin recovered to 11.7%, with adjusted operating profit rising from GBP735 million to over GBP1.1 billion.

Record Investments and Shareholder Returns

ABF invested GBP1.3 billion, supporting future growth and ESG priorities. A total dividend increase of 50% was proposed, and GBP2.3 billion was returned to shareholders over two years through dividends and share buybacks.

Strong Growth in Primark

6% growth at constant currency, driven by strong performance in the US, France, Spain, Italy, and Central and Eastern Europe. Primark's operating margin recovered significantly, and return on average capital employed increased from 12% to 18.7%.

Positive Outlook for Future Growth

Targeted mid-single-digit growth for Primark in 2025. Store rollout plans continue, with a significant opportunity in growth markets and the US.

Negative Updates

Challenges in Sugar Division

European Sugar faced a significant price decline in Q4, impacting profitability and expected to affect the following year. The market faced a surplus due to increased acreage and high yields.

Struggles in Specific Markets

Challenges in the German retail market required restructuring. Additionally, the Agri division saw a decline in compound feed sales, and the Frontier JV was negatively impacted by weather conditions in the UK.

Exit from China

ABF fully exited its business in China to streamline focus and resources, indicating challenges in achieving desired results in that market.

Company Guidance

In the most recent call, ABF reported strong financial results for the fiscal year 2024, ending on September 14. Operating profit saw an impressive increase of 38%, while adjusted earnings per share rose by 39%. Cash generation was notably high, reaching GBP1.4 billion, up by GBP1.1 billion from the previous year. The return on capital employed improved significantly, climbing to 18.1% from 13.6% last year. The group also proposed a total dividend increase of 50%, contributing to a total shareholder return of approximately GBP2.3 billion over the past two years through dividends and share buybacks. The call highlighted operational progress across various segments, with Primark's sales growing 6% and a recovery in operating margin to 11.7%. ABF's grocery and sugar segments also reported strong performances, contributing to an overall substantial improvement in profitability and strategic growth investments.

Associated British Foods Financial Statement Overview

Summary

Associated British Foods demonstrates solid financial health with strong revenue growth, profitability, and operational efficiency. The income statement reflects robust margins, the balance sheet shows financial stability, and cash flow statements indicate effective cash generation. However, increasing liabilities require attention to maintain this position.

Income Statement

Very Positive

Associated British Foods has demonstrated solid revenue growth and consistent profitability. The revenue growth rate is strong with an increase from the previous year, reflecting a positive trajectory. Gross Profit and Net Profit Margins are healthy, indicating efficient cost management and strong bottom-line performance. The EBIT and EBITDA margins also show robust operational efficiency, further supporting its profitability.

Balance Sheet

Positive

The company maintains a stable balance sheet with an adequate equity ratio, suggesting financial stability. The Debt-to-Equity Ratio is moderate, indicating a balanced approach to leverage. Return on Equity is strong, demonstrating effective utilization of equity to generate profits. However, there is a slight increase in total liabilities, which requires monitoring to maintain financial health.

Cash Flow

Very Positive

Cash flow performance is impressive, with significant growth in Free Cash Flow. The Operating Cash Flow to Net Income Ratio is robust, reflecting efficient conversion of profits into cash. The Free Cash Flow to Net Income Ratio is also strong, underscoring effective capital expenditure management. These factors indicate a healthy cash position that supports operational and strategic flexibility.

Breakdown	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	20.07B	19.75B	17.00B	13.88B	13.94B
Gross Profit	4.88B	4.16B	3.78B	3.13B	3.14B
EBITDA	3.13B	2.48B	2.13B	1.80B	1.81B
Net Income	1.46B	1.04B	700.00M	478.00M	455.00M
Balance Sheet
Total Assets	19.01B	18.84B	19.77B	16.89B	16.67B
Cash, Cash Equivalents and Short-Term Investments	1.66B	1.46B	2.13B	2.31B	2.03B
Total Debt	3.68B	3.72B	3.89B	3.69B	4.11B
Total Liabilities	7.74B	7.65B	8.22B	6.89B	7.23B
Stockholders Equity	11.19B	11.09B	11.45B	9.92B	9.36B
Cash Flow
Free Cash Flow	1.69B	581.00M	384.00M	786.00M	1.13B
Operating Cash Flow	2.87B	1.65B	1.15B	1.41B	1.75B
Investing Cash Flow	-1.33B	-906.00M	-744.00M	-561.00M	-518.00M
Financing Cash Flow	-1.57B	-1.28B	-677.00M	-512.00M	-678.00M

Associated British Foods Technical Analysis

Technical Analysis Sentiment

Positive

Last Price29.33

Price Trends

50DMA

27.91

Positive

100DMA

26.74

Positive

200DMA

26.54

Positive

Market Momentum

MACD

0.22

Negative

RSI

65.10

Neutral

STOCH

100.07

Negative

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 29.33 is above the 20-day moving average (MA) of 28.17, above the 50-day MA of 27.91, and above the 200-day MA of 26.54, indicating a bullish trend. The MACD of 0.22 indicates Negative momentum. The RSI at 65.10 is Neutral, neither overbought nor oversold. The STOCH value of 100.07 is Negative, 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 (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ASBFY	79 Outperform	$20.89B	12.94	12.04%	1.89%	1.55%	17.02%
KHC	74 Outperform	$32.93B	12.61	5.36%	5.75%	-4.25%	-4.04%
CAG	70 Outperform	$9.10B	7.94	13.27%	7.34%	-3.64%	231.77%
MKC	69 Neutral	$19.17B	24.80	14.19%	2.52%	0.89%	4.85%
FLO	65 Neutral	$3.26B	14.34	16.34%	6.42%	-1.02%	81.53%
Sector *	65 Neutral	$27.01B	15.34	-4.26%	3.22%	1.00%	3.39%
GIS	63 Neutral	$27.18B	12.23	24.57%	4.87%	-1.87%	-5.16%

* Consumer Defensive Sector Average

Performance Comparison

ASBFY

Associated British Foods

29.33

-1.50

-4.87%

CAG

Conagra Brands

19.07

-9.10

-32.30%

FLO

Flowers Foods

15.42

-5.74

-27.13%

GIS

General Mills

50.10

-11.93

-19.23%

MKC

McCormick & Company

71.42

-0.34

-0.47%

KHC

Kraft Heinz

27.82

-3.34

-10.72%

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: Jul 05, 2025