Associated British Foods plc( LON:ABF ) last week reported its latest interim results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results were roughly in line with estimates, with revenues of UK£9.5b and statutory earnings per share of UK£1.42. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following last week's earnings report, Associated British Foods' 18 analysts are forecasting 2026 revenues to be UK£19.5b, approximately in line with the last 12 months. Per-share earnings are expected to climb 12% to UK£1.51. In the lead-up to this report, the analysts had been modelling revenues of UK£19.6b and earnings per share (EPS) of UK£1.56 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
See our latest analysis for Associated British Foods
The consensus price target held steady at UK£18.80, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Associated British Foods at UK£22.00 per share, while the most bearish prices it at UK£16.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Associated British Foods' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 0.8% growth on an annualised basis. This is compared to a historical growth rate of 7.9% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.0% annually. Factoring in the forecast slowdown in growth, it seems obvious that Associated British Foods is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Associated British Foods' revenue is expected to perform worse than the wider industry. The consensus price target held steady at UK£18.80, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Associated British Foods. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Associated British Foods analysts - going out to 2028, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for Associated British Foods that we have uncovered.
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