Deutsche Bank upgrades Associated British Foods to 'buy', sees headwinds reversing

Deutsche Bank upgraded its recommendation for shares of Associated British Foods from 'hold' to 'buy', judging that the headwinds from energy prices and foreign exchange rates were reversing.

In a research note sent to clients, analyst Adam Cochrane said: "The guidance for FY 2023 was given at a relative low point for GBP strength and energy headwinds have reduced significantly since this stage," Dow Jones Newswires reported.

AB Foods' Primark unit was likely to improve its margins, benefiting from both trading down and new space growth, Cochrane added.

The analyst also pointed to the company's "robust" balance sheet and ongoing share buybacks to support his upgrade.