Citi, the US investment bank, has increased its target price for Associated British Foods PLC (LSE:ABF) shares after the company's trading statement.
Citi is more optimistic about ABF's profits in 2023, thanks to better sales at Primark, ABF's clothing store.
Primark has done well in the first half of the year, with sales growing 7% compared to the same period last year.
Citi is less optimistic about Primark's sales growth in the second half of the year but thinks the company will still perform well.
Citi is concerned about the impact of inflation on consumer spending but still thinks ABF's profits will rise. Citi has raised its earnings estimate for ABF to £1.5bn, up 1% compared to last year, mostly because of Primark's profitability.
Citi's target price for ABF shares is now 2100p, up from 1900p. The stock rose 1.8% to 2,010p on Tuesday.
Of the 21 banks and brokerages logged as following ABF, 14 are neutral on the shares. The consensus price target is 1,989p.