Shares of Associated British Foods plc (LON:ABF) experienced a significant decline of 10.4% during mid-day trading on Thursday. This drop followed a downgrade by Deutsche Bank Aktiengesellschaft, which reduced its price target from GBX 2,100 to GBX 1,925. Deutsche Bank currently holds a “hold” rating on the stock. Following the announcement, the shares reached as low as GBX 1,844 before closing at GBX 1,926.58.
Trading volume was notably lower, with approximately 4,048,014 shares changing hands, marking a decline of 53% compared to the average daily volume of 8,639,694 shares. The previous closing price stood at GBX 2,151.
Analyst Ratings and Market Reactions
Several other brokerages have recently reassessed their positions regarding Associated British Foods. Shore Capital downgraded the shares to a “hold” rating in a report released on Friday. Similarly, JPMorgan Chase & Co. lowered its price target from GBX 2,095 to GBX 1,940, assigning a “neutral” rating. Additionally, Jefferies Financial Group reaffirmed an “underperform” rating with a price objective set at GBX 1,650.
On the other hand, Citigroup raised its price objective slightly from GBX 1,830 to GBX 1,840, while maintaining a “sell” rating. Currently, the consensus among analysts shows one “buy” rating, three “hold” ratings, and two “sell” ratings, according to data from MarketBeat.com. The average rating for the stock is “reduce,” with a consensus price target of GBX 1,931.
Company Overview and Financial Performance
“Associated British Foods is a diversified international food, ingredients and retail group with sales of £13.9 billion and operations in 53 countries,”
the company states. As of the latest report on November 4, 2023, Associated British Foods reported earnings of GBX 174.90 per share for the quarter. The company boasts a return on equity of 13.07% and a net margin of 7.25%.
Financial metrics indicate a current ratio of 1.78, a quick ratio of 0.93, and a debt-to-equity ratio of 32.88. The stock has a market capitalization of approximately £13.15 billion, with a price-to-earnings ratio of 13.13 and a price-to-earnings-growth ratio of 1.51. The fifty-day simple moving average stands at GBX 2,132.80, while the 200-day simple moving average is at GBX 2,147.53.
As the market digests these developments, Associated British Foods faces a challenging landscape, with analysts closely monitoring the company’s performance and future outlook.
