Primark owner Associated British Foods PLC (LSE:ABF) will issue a year-end trading update on Wednesday, with investors set to scrutinise how well the diversified group is balancing pressures across its divisions.
At just under £23 a pop, the shares have rallied over 70% from decade lows in 2022, but are down almost 20% from highs above £27 seen a year ago and are well below their 2015 peak above £35.
The stock’s momentum has been tempered by two profit warnings in its sugar unit, concerns over Chinese competition and the potential impact of US tariffs on Primark, overshadowing improved retail margins, a special dividend and a second buyback programme.
Deutsche Bank analysts applauded the moves, which are expected to generate a profit boost of around £60 million in the 2026 financial year, equivalent to roughly 3% of group earnings before interest and tax, but said the market appears to be waiting for clearer signs of recovery across the group’s businesses before the shares can truly rerate.
Analysts expect Primark to again dominate investor attention, with forecasts pointing to a low single-digit rise in sales and adjusted operating profit, while underlying margins are seen flat at 11.7%.
Meanwhile, the Sugar division is tipped to fall into loss, with restructuring in Spain, the proposed closure of the UK’s Vivergo bioethanol operation and the recent Hovis acquisition all under review.
The consensus forecast is for earnings per share of 160p for the year to September, down from 194p a year ago, with adjusted EPS at 174p.
"Management may wait until November’s full-year results publication before giving any guidance for the year to September 2026, but consensus is looking for a recovery to an earnings per share figure of around 190p," said analysts at AJ Bell.