The Associated British Foods plc (LON:ABF) Half-Yearly Results Are Out And Analysts Have Published New Forecasts

It's been a good week for Associated British Foods plc (LON:ABF) shareholders, because the company has just released its latest half-yearly results, and the shares gained 10.0% to UK£26.86. Associated British Foods reported in line with analyst predictions, delivering revenues of UK£9.7b and statutory earnings per share of UK£1.34, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Associated British Foods after the latest results.

See our latest analysis for Associated British Foods

After the latest results, the 16 analysts covering Associated British Foods are now predicting revenues of UK£20.6b in 2024. If met, this would reflect a credible 3.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 15% to UK£1.81. In the lead-up to this report, the analysts had been modelling revenues of UK£20.7b and earnings per share (EPS) of UK£1.70 in 2024. So the consensus seems to have become somewhat more optimistic on Associated British Foods' earnings potential following these results.

The consensus price target was unchanged at UK£25.91, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Associated British Foods analyst has a price target of UK£34.00 per share, while the most pessimistic values it at UK£19.79. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 6.8% growth on an annualised basis. That is in line with its 6.2% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 3.8% annually. So although Associated British Foods is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Associated British Foods' earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Associated British Foods analysts - going out to 2026, and you can see them free on our platform here.

You can also see our analysis of Associated British Foods' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.