Analysts Are Updating Their Associated British Foods plc (LON:ABF) Estimates After Its Interim Results

Shareholders might have noticed that Associated British Foods plc (LON:ABF) filed its interim result this time last week. The early response was not positive, with shares down 5.3% to UK£20.64 in the past week. Results were roughly in line with estimates, with revenues of UK£9.5b and statutory earnings per share of UK£1.94. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

We've discovered 1 warning sign about Associated British Foods. View them for free.

Taking into account the latest results, Associated British Foods' 17 analysts currently expect revenues in 2025 to be UK£19.9b, approximately in line with the last 12 months. Statutory earnings per share are forecast to reduce 8.2% to UK£1.67 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£20.1b and earnings per share (EPS) of UK£1.83 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

Check out our latest analysis for Associated British Foods

It might be a surprise to learn that the consensus price target was broadly unchanged at UK£22.33, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Associated British Foods, with the most bullish analyst valuing it at UK£31.20 and the most bearish at UK£17.30 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Associated British Foods' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 0.9% growth on an annualised basis. This is compared to a historical growth rate of 9.3% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.2% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Associated British Foods.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Associated British Foods. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Associated British Foods' revenue is expected to perform worse than the wider industry. The consensus price target held steady at UK£22.33, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Associated British Foods going out to 2027, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 1 warning sign for Associated British Foods you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.