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Primark owner AB Foods downgraded by Goldman Sachs

The US investment bank has abandoned its bullish position on Primark owner after factoring in the recent exchange rate fluctuation into its valuation

Primark shop
GS has lopped a quid off the price target, which now stands at 3,000p

Primark owner Associated British Foods PLC (LON:ABF) has been downgraded by Goldman Sachs after the US investment bank updated its forecast assumptions for fiscal 2019.

Factoring in the strength of the dollar against sterling since the end of March, Goldman has cut £26mln off its earnings before interest and tax (Ebit) forecast, which now stands at £930mln, up 13% year-on-year.

READ: AB Foods blames weather for drop in like-for-like sales at Primark in the first half

The earnings per share forecast has been trimmed by 2% to 146.3p, up 10% year-on-year.

The changes fed through to a cut in its sum of the parts-based price target to 3,000p from 3,100p and a downgrade to ‘neutral’ on valuation grounds.

AB Foods currently trades at 2,721p, down 1.1% on the day.

Quick facts: Associated British Foods PLC

Price: 2521 GBX

LSE:ABF
Market: LSE
Market Cap: £19.96 billion
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