The ABF share price rose to the highest level since September 6 as investors cheered the company’s earnings. It rose to a high of 1,507, which was about 20% above the lowest level in October. Still, it remains in a bear market, falling by more than 33% from its highest level this year.
Associated British Food earnings
ABF is one of the leading food companies in the UK. It participates in industries like agriculture, sugar, grocery, ingredients, and retail. Its best-known brands is Primark, one of Europe’s biggest fashion retailers. It has over 408 stores in 14 countries. The firm has a presence in the UK and several other countries, including the United States.
In a statement on Wednesday, Associated British Foods said that its total revenue rose by 22% to £16.99 billion. As a result, the company’s adjusted operating profit rose by 42% while its profit before tax was £1.3 billion. Its food sales rose by 10% while Primark’s sals jumped to £7.7 billion. In the statement, the management said that footfall had increased substantially in the past few months.
ABF also decided to boost its dividend. It hiked its dividend payouts by 8% to 43.7p. Most importantly, the company announced a new 500 million pound share buyback program. The management said:
“Sales, margin and profits at Primark increased significantly as more normal customer behaviour resumed after the pandemic. Significant progress was made in building out Primark’s digital capability, which will be a key element in the future development of Primark.”
So, what next for the ABF share price? Associated British Foods has done well this year and there is a likelihood that it will continue the trend in the coming months. It has a strong balance sheet even as interest rates rise. Therefore, fundamentally, the company is in a good place despite rising challenges like inflation and weaker pound.
ABF share price forecast
The daily chart shows that the ABF stock price has done well in the past few weeks. As it rose, the stock moved above the key resistance level at 1,451p, the lowest point on April 19. The shares have moved above the 25-day and 50-day moving averages while the Stochastic Oscillator has moved above the overbought level.
Therefore, the stock will likely continue rising as bulls target the key resistance level at 1,600p. A drop below the support at 1,400p will invalidate the bearish view.
