Broker snap: Jefferies keeps hold of AB Foods

24th Apr 2012 12:27

Jefferies has maintained its hold recommendation for food and retail group Associated British Foods but acknowledged the firm's solid first-half results.There were no real surprises in the first-half figures, according to Jefferies, with operating profit up 6% at £412 and in line with consensus estimates. Sugar profits (up 59% on the year) offset weakness in Grocery (-31%), Ingredient (-40%) and muted growth from Retail.While the group is saying that it is confident of making "substantial" earnings per share (EPS) growth for the full year, "We highlight that consensus is already looking for 16% EPS growth in the year and we would thus not expect material consensus upgrades at this stage," said Jefferies.The broker says that the stock is trading on a 2012 calendarised price-to-earnings multiple of 14x, in-line with its 10-year historical average. The price target is set at 1,155p.Shares were trading 2.72% higher at 1,248p by 12:23 on Tuesday.BC