Associated British Foods (ASBFY) AI Stock Analysis

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Associated British Foods

(OTC:ASBFY)

81Outperform

Associated British Foods is well-positioned for growth with strong financial performance, positive earnings call highlights, and attractive valuation. The company shows robust operational efficiency and strategic investments, although challenges in specific segments require attention.

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

Market Cap

$19.56B

Dividend Yield3.71%

Average Volume (3M)1.31K

Price to Earnings (P/E)12.0

Beta (1Y)0.57

Revenue Growth1.55%

EPS Growth17.02%

CountryUS

Employees138,000

SectorConsumer Defensive

Sector Strength82

IndustryPackaged Foods

Share Statistics

EPS (TTM)2.27

Shares Outstanding723,449,600

10 Day Avg. Volume0

30 Day Avg. Volume1,314

Financial Highlights & Ratios

PEG Ratio0.71

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

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 across five business segments: Grocery, Sugar, Agriculture, Ingredients, and Retail. Its core products and services include a wide range of grocery brands, sugar production, agricultural supplies, yeast and bakery ingredients, as well as fashion retail through Primark, a leading clothing retailer in Europe and the United States.

How the Company Makes MoneyAssociated British Foods makes money through its diversified operations. In the Grocery segment, it earns revenue by producing and selling a variety of branded food products, including Twinings tea, Silver Spoon sugar, and Jordans cereal. The Sugar segment generates income from the production and sale of sugar to various industries. The Agriculture division provides products and services to farmers, including animal feed and crop inputs, contributing to its revenue. The Ingredients segment earns money by supplying yeast and bakery ingredients to food manufacturers globally. The Retail segment, primarily through Primark, generates revenue through the sale of affordable fashion and clothing items. The company's earnings are bolstered by its strong brand portfolio, extensive distribution networks, and key partnerships with suppliers and retailers worldwide.

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.

Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
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
	EBIT
1.93B	1.38B	1.18B	808.00M	810.00M
	EBITDA
3.13B	2.48B	2.13B	1.80B	1.81B
	Net Income Common Stockholders
1.46B	1.04B	700.00M	478.00M	455.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.66B	1.46B	2.13B	2.31B	2.03B
	Total Assets
19.01B	18.84B	19.77B	16.89B	16.67B
	Total Debt
3.68B	3.72B	3.89B	3.69B	4.11B
	Net Debt
2.35B	2.27B	1.77B	1.41B	2.12B
	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

Neutral

Last Price27.01

Price Trends

50DMA

25.79

Positive

100DMA

25.19

Positive

200DMA

27.26

Negative

Market Momentum

MACD

0.50

Positive

RSI

49.36

Neutral

STOCH

12.40

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ASBFY, the sentiment is Neutral. The current price of 27.01 is below the 20-day moving average (MA) of 27.69, above the 50-day MA of 25.79, and below the 200-day MA of 27.26, indicating a neutral trend. The MACD of 0.50 indicates Positive momentum. The RSI at 49.36 is Neutral, neither overbought nor oversold. The STOCH value of 12.40 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ASBFY.

Associated British Foods Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ASBFY	81 Outperform	$19.56B	12.05	12.04%	3.71%	1.55%	17.02%
GIS	70 Outperform	$30.35B	12.17	27.37%	4.36%	-2.62%	4.27%
CAG	68 Neutral	$11.15B	34.40	3.67%	5.95%	-3.15%	-65.38%
KHC	68 Neutral	$33.61B	12.96	5.36%	5.60%	-4.25%	-4.04%
MKC	67 Neutral	$20.39B	26.10	14.73%	2.31%	0.40%	10.89%
Sector *	64 Neutral	$8.87B	14.73	5.02%	174.27%	3.56%	3.79%
FLO	58 Neutral	$3.68B	14.91	17.97%	5.50%	0.25%	101.63%

* Consumer Defensive Sector Average

Performance Comparison

ASBFY

Associated British Foods

27.01

-5.45

-16.79%

CAG

Conagra Brands

23.35

-5.82

-19.95%

FLO

Flowers Foods

17.41

-6.59

-27.46%

GIS

General Mills

54.56

-12.73

-18.92%

MKC

McCormick & Company

74.73

0.28

0.38%

KHC

Kraft Heinz

28.40

-5.71

-16.74%

Associated British Foods Earnings Call Summary

Earnings Call Date:Nov 05, 2024

(Q4-2024)

% Change Since: -9.91%|

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.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.