Primark owner Associated British Foods PLC (LSE:ABF) fell on Tuesday morning after Deutsche Bank analysts warned of tougher times ahead.
Deutsche pushed ABF from a ‘hold’ to a ‘sell’ rating in a note, suggesting "the Primark margin recovery story has played out" and profitability at subsidiary British Sugar looked set to decrease.
"We see the factors driving the 2024 earnings upgrades are reversing as we look into 2025," Deutsche added.
This follows a lack of increased investment and like-for-like leverage, according to the bank, while the sugar business is likely to give up some margin gains.
ABF's share price target was slashed by Deutsche from 2,290p to 2,190p, marking a prospective 13% drop from Friday's close.
Shares fell 1.8% on Tuesday following the downgrade.