Associated British Foods (LON: ABF) shares are trading higher Monday, up over 1% ahead of Tuesday's trading update, after the company's rating was lifted at Deutsche Bank.
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ABF shares opened Monday's session at around 1,857.5p, although they are currently trading around the 1,846p mark.
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Deutsche Bank analyst Adam Cochrane upgraded Associated British Foods to Buy from Hold, raising the firm's price target on the stock to 2,180p from 1,600p in a research note.
The analyst told investors that he believes earnings expectations for the Primark owner will begin to recover as the headwinds that the company has faced during 2022 start to reverse. Cochrane pointed to headwinds such as high energy prices, currency, and Primark.
Earlier this month, Exane BNP Paribas analyst Warwick Okines upgraded ABF to Outperform from Neutral with a 1,875p price target, while in December, the stock was assumed with an Overweight rating from Equal Weight at Morgan Stanley.
Morgan Stanley analyst Grace Smalley also lifted the price target for ABF to 1,900p from 1,850p, stating in a research note that revenue pressures and cost headwinds are “colliding,” creating a “perfect storm” for apparel retail.
The analyst said she assumed coverage of the sector with a “cautious view,” but ABF is her preferred name, with H&M the least preferred.
ABF will post a trading update on Tuesday, January 24.
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