A confident outlook AB Foods reported full year results which were c.2% ahead of expectations and announced a new share buyback and a special dividend. It guided Primark margins to be over 10% based on modest growth expectations which management said had upside risks. All in all, it was a strong set of results reflecting improved confidence in the outlook. We raise our estimates by 4% and our TP to 2,375p. A stronger balance sheet Management followed its first ever share buyback with a new GBP 500m programme over the next 12 months, as well as announcing a special dividend. Capital expenditure will not rise much as some feared, despite Primark''s investment phase into new stores, refurbishment and supply chain automation. Moreover, management guided to further inventory reductions as well as some materially helpful cashflows from lower tax and pension payments. Double-digit margins Management guided FY24 Primark operating margins to be above 10% (FY23: 8.2%) compared with consensus expectations of 9.7%. It did not quantify current trading but it seems likely that sales have caught up after the warm start to the Autumn/Winter season. Indeed, despite its caution about consumer demand, management sees more upside than downside to its guidance for ''modest'' Primark like for like sales growth. Delivering LFL growth consistently remains a key to unlock a higher valuation multiple, in our view. Buyback and higher margins drive 4% EPS increase Factoring in Primark FY24 margins of 10.4% and adding the share buyback drives earnings upgrades of c.4% for FY24 and c.6% for FY25. Our DCF/SOTP derived target price rises to 2,375p. With modest upside to this target we maintain our Neutral rating.