After strong-than-expected performance at Primark, UBS has raised its its price target for the retail chain's owner Associated British Foods which it marks as a buy.

AB Foods announced yesterday that group revenue rose 12% in the first 16 weeks of the financial year, helped by an "exceptional sales performance" from its Sugar and Primark divisions, which saw sales growth of 21% and 16%, respectively.

While UBS leaves its full-year adjusted pre-tax profit estimate at £990m (representing 19% year-on-year growth), it said that has edged up its contribution from Primark "which has seen stronger-than-expected LFL (3%) and new space (13%) growth."

"We believe our estimates to be well underpinned (by what continues to be a 'tight' global sugar market) and as management progressively get a better line of sight on the FY outturn we see the potential for upgrades," said analyst Alan Erskine.

UBS's price target rises from 1,200p to 1,245p.

By 10:53 on Friday morning, AB Foods' shares were trading 1.47% higher at 1,176p.

BC

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