Deutsche Bank downgrades Primark owner AB Foods to 'sell'

Associated British Foods slumped on Tuesday as Deutsche Bank downgraded its rating on shares of the Primark owner to ‘sell’ from ‘hold’ and cut the price target to 2,190p from 2,290p.

The bank said it was taking a more cautious view on the shares, with AB Foods’ profit recovery phase having come to an end.

DB said the margin recovery story at Primark has played out given a lack of like-for-like leverage and increased investment. Meanwhile, profitability in the sugar division is set to fall and the grocery business will give up some of its margin gains.

At 1130 BST, the shares were down 2.2% at 2,460p.