No-Moat ABF's Fair Value Estimate Reduced to GBX 2,200

Following a transfer of coverage, we lower our fair value estimate for ABF to GBX 2,200 from GBX 2,560. Although we expect strong top-line growth in the near term as the company's Primark retail segment rebounds from the COVID-19 disruption and continues its expansion, we believe that intense competition and a lack of meaningful differentiation will limit the longer-term like-for-like growth potential and margin opportunities. Shares screen as attractive even after the 14% fair value reduction, having lost 30% of their value over the last year. However, we caution that there are many risk factors that could affect ABF's disparate segments, and we assign ABF a high uncertainty rating.