We give our thoughts on what to expect from companies announcing results week commencing 10 February 2020.
Companies reporting w/c 10 February
Ocado Group Plc (Q4 2019 Earnings Release)
These are difficult times for many companies in the supermarket sector but as a delivery/technology company Ocado has been one of the few to benefit from consumer trends. Given a trading update for the groceries delivery side of the business in December, the market will be more interested in how trading went over the Christmas period and whether the technology business has signed up any more retailers for new warehouses. The all-important deal to begin M&S deliveries in September is now looming large and investors will be interested in how preparations for that are going.
We currently list Ocado as a HOLD
TUI (Q1 2020 Results)
Full-year results in December from the tourism group beat expectations but the market is now more focused on what impact the company expects from the extended grounding of the Boeing 737 Max aircraft. TUI said previously it could cost them up to €400m if the planes were unavailable until April 2020, but they aren’t expected to back in operation until September. While the collapse of Thomas Cook has reduced competition for TUI, market conditions have been difficult so investors will be keen to hear what volume of bookings and prices the company expects for the main summer season.
We currently list TUI as a HOLD
Centrica Plc (Q4 2019 Earnings Release)
Centrica release its Q4 earnings on Thursday which investors will be nervously anticipating. Confidence in management is lagging and investors are losing patience with the company. Despite benefiting from a slight boost post-election, shares have trickled back. However, the trading update in November cast some optimism, with customers leaving British Gas slowing down alongside improved US and EU performance. Combining this positive news and the beneficial election result, investors may be hoping for some surprise when the figures are released next week.
We currently list Centrica as a HOLD
RELX Plc (Q4 2019 Earnings Release)
Off the back of a positive Q3 update in October where all divisions posted underlying growth, RELX investors will be hoping this momentum continues as they head into the Q4 earnings release on Thursday. With the group having moved away from its traditional trade journals core, alternative streams of revenue have helped the business evolve. Investors will be hoping the Risk and Business Analytics segment can sustain good growth off the back of Q3 figures as the growing emphasis on data and security continues to evolve. Shares have performed well year-to-date currently around 9% pushing past £20.
We currently list RELX as a BUY
Coca Cola HBC (Finals)
Coca Cola is scheduled to release its Final results next Thursday expecting to achieve full-year revenue growth of 4-4.5%. Sugary drinks have been dividing investor views in recent times with signs that consumers are moving to healthier alternatives as opposed to their sugary counterparts. Despite this, investors will be hoping to see the maintained momentum in emerging markets alongside the continued reduction in operating expenses which have proven to be problematic in the past highlighted by the August interim profit figures.
We currently list Coca Cola as a HOLD
Barclays Plc (Q4 2019 Earnings Release)
The bank continues to face challenging times and Q3 numbers felt the effects of further litigation and PPI related charges. Q4 may not be too different as well as having to face even lower net interest charges following a series of rate cuts in the US and markets in the UK also adjusting interest rates lower given the uncertain political and economic environment faced in the last quarter. It will be interesting to see if consumers and businesses views have improved since the elections in seeking capital for investments.
We currently list Barclays as a HOLD
AstraZeneca Plc (Q4 2019 Earnings Release)
The pharmaceutical giant has had a fantastic couple of years as R&D investments have materialised into fast selling new drugs which are now more than making up for losses due to generic competition. Successive good trading updates during 2019 led management to upgrade sales forecasts for 2019, although costs and other collaboration revenues left them to maintain their EPS guidance of between $3.50 to $3.70. China has been one of the key growth drivers and no doubt this continued into the fourth quarter but it will be interesting to see the impact in the first months of trading in the new year following the virtual shutdown of parts of the country.
We currently list AstraZeneca as a BUY
SEGRO Plc (Q4 2019 Earnings Release)
The industrial property group has done exceptionally well in recent years, the vacancy rate which last stood at 4.8% will be closely watched as there have been some signs of weakness among some retailers given the uncertain economic environment lately. Acquisitions in other areas such as exposure to the air cargo sector via Heathrow are welcomed and investors will closely watch the progress here and whether it is expanding its overall capacity.
We currently list SEGRO as a HOLD
Royal Bank of Scotland Group Plc (Q4 2019 Earnings Release)
We’re in interesting times for the UK banking sector as it copes with the likelihood of lower interest rates for longer than expected but the relief of having a Conservative government firmly in place for the next five years. There have already been rumours the Chancellor Sajid Javid might look at selling the government’s remaining 62% in RBS at a fairly early opportunity, but that will depend to some extent on the bank’s performance. That wasn’t looking too good in the Q3 update in October with hefty PPI claims taking the bank into a loss. Also of interest will be any comment on speculation that new CEO Alison Rose is looking to close NatWest Markets, RBS’s investment banking unit.
We currently list RBS as a HOLD
All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.