Associated British Foods (ASBFY) AI Stock Analysis

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Associated British Foods

(OTC:ASBFY)

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Outperform 74 (OpenAI - 4o)

Rating:74Outperform

Price Target:

$31.00

▲(3.40% Upside)

Associated British Foods has a strong financial foundation with robust revenue growth and profitability. The valuation is fair, supported by a solid dividend yield. However, technical indicators suggest caution due to potential bearish trends and overbought conditions. Investors should consider the company's financial strength and valuation while being mindful of technical signals.

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

Market Cap

$21.20B

Dividend Yield3.91%

Average Volume (3M)1.70K

Price to Earnings (P/E)13.1

Beta (1Y)0.45

Revenue Growth1.55%

EPS Growth17.02%

CountryUS

Employees138,000

SectorConsumer Defensive

Sector Strength42

IndustryPackaged Foods

Share Statistics

EPS (TTM)1.12

Shares Outstanding715,863,900

10 Day Avg. Volume1,700

30 Day Avg. Volume1,702

Financial Highlights & Ratios

PEG Ratio0.29

Price to Book (P/B)1.68

Price to Sales (P/S)0.94

P/FCF Ratio11.14

Enterprise Value/Market Cap0.99

Enterprise Value/Revenue1.06

Enterprise Value/Gross Profit12.25

Enterprise Value/Ebitda8.50

Forecast

1Y Price Target

$31.00

Price Target Upside3.40% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering0

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:

Main Street Data

Associated British Foods Earnings Call Summary

Earnings Call Date:Apr 29, 2025

(Q4-2024)

% Change Since: |

Next Earnings Date:Nov 04, 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 exhibits strong financial performance with consistent revenue growth and improved profitability margins. The balance sheet is stable with moderate leverage, and cash flow generation is robust, enhancing liquidity and financial flexibility.

Income Statement

Very Positive

Associated British Foods has demonstrated strong revenue growth with a 1.64% increase from 2023 to 2024. The gross profit margin improved to 24.32%, and the net profit margin increased to 7.25%, indicating enhanced profitability. The EBIT margin rose to 9.63%, and the EBITDA margin reached 15.61%, reflecting efficient operational management. Overall, the company shows robust financial health in its income statement.

Balance Sheet

Positive

The company's balance sheet is solid with a debt-to-equity ratio of 0.33, indicating moderate leverage. The return on equity stands at 13.00%, showcasing effective use of equity to generate profits. The equity ratio is 58.82%, suggesting a strong equity base relative to total assets. While the balance sheet is stable, there is room for improvement in reducing debt levels.

Cash Flow

Very Positive

Associated British Foods has shown significant improvement in cash flow metrics. The free cash flow growth rate is an impressive 190.19%, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 1.97, and the free cash flow to net income ratio is 1.16, both reflecting healthy cash flow relative to earnings. The company is well-positioned in terms of liquidity and cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	19.85B	20.07B	19.75B	17.00B	13.88B	13.94B
Gross Profit	1.72B	4.88B	4.16B	3.78B	3.13B	3.14B
EBITDA	2.48B	3.13B	2.48B	2.13B	1.80B	1.81B
Net Income	1.31B	1.46B	1.04B	700.00M	478.00M	455.00M
Balance Sheet
Total Assets	18.68B	19.01B	18.84B	19.77B	16.89B	16.67B
Cash, Cash Equivalents and Short-Term Investments	824.00M	1.66B	1.46B	2.13B	2.31B	2.03B
Total Debt	3.60B	3.68B	3.72B	3.89B	3.69B	4.11B
Total Liabilities	7.58B	7.74B	7.65B	8.22B	6.89B	7.23B
Stockholders Equity	10.99B	11.19B	11.09B	11.45B	9.92B	9.36B
Cash Flow
Free Cash Flow	1.36B	1.69B	581.00M	384.00M	786.00M	1.13B
Operating Cash Flow	2.45B	2.87B	1.65B	1.15B	1.41B	1.75B
Investing Cash Flow	-1.05B	-1.33B	-906.00M	-744.00M	-561.00M	-518.00M
Financing Cash Flow	-1.94B	-1.57B	-1.28B	-677.00M	-512.00M	-678.00M

Associated British Foods Technical Analysis

Technical Analysis Sentiment

Positive

Last Price29.98

Price Trends

50DMA

28.86

Positive

100DMA

28.67

Positive

200DMA

26.94

Positive

Market Momentum

MACD

0.31

Negative

RSI

69.88

Neutral

STOCH

99.77

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 29.98 is above the 20-day moving average (MA) of 28.06, above the 50-day MA of 28.86, and above the 200-day MA of 26.94, indicating a bullish trend. The MACD of 0.31 indicates Negative momentum. The RSI at 69.88 is Neutral, neither overbought nor oversold. The STOCH value of 99.77 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ASBFY	74 Outperform	$21.20B	13.14	12.04%	3.91%	1.55%	17.02%
MKC	70 Outperform	$17.87B	23.05	13.92%	2.67%	1.64%	-1.83%
GIS	68 Neutral	$25.45B	9.03	30.98%	5.00%	-3.26%	25.58%
JBS	68 Neutral	$13.43B	9.69	17.67%	0.02%	―	288.18%
HRL	63 Neutral	$13.06B	17.32	9.46%	4.83%	0.65%	-3.76%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
KHC	56 Neutral	$29.74B	12.81	-11.68%	6.27%	-3.83%	-384.08%

* Consumer Defensive Sector Average

Performance Comparison

ASBFY

Associated British Foods

29.98

0.92

3.17%

GIS

General Mills

48.39

-17.37

-26.41%

HRL

Hormel Foods

24.03

-6.02

-20.03%

MKC

McCormick & Company

67.54

-8.62

-11.32%

KHC

Kraft Heinz

25.52

-8.07

-24.03%

JBS

13.03

2.00

18.13%

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: Oct 02, 2025