Primark owner Associated British Foods PLC (LSE:ABF) faced a blow on Friday morning as Deutsche Bank wound down expectations after the firm's own warning on Thursday.
ABF’s update had shown Primark sales down on a like-for-like basis over the first half of the year, while profits from its sugar business were lower than expected.
“Investors were already cautious on the weak Primark [...] performance but this remains the main ongoing cause for investor uncertainty on the stock,” Deutsche said in a note.
A ‘sell’ rating was reiterated as a result, with Deutsche also winding down pre-tax earnings forecasts for the coming three years.
The bank’s share price target for ABF was cut too, from 2,190p to 2,130p.
“We need to see more evidence of a recovery in Primark like-for-like, otherwise we believe they will need to invest more into the brand to deliver a sales uplift,” Deutsche added.
Shares fell 1.9% to 2,245p on Friday, following a drop on Thursday.