We give our thoughts on what to expect from companies announcing results week commencing 27 January 2020.
Companies reporting w/c 27 January
Diageo Plc (Q2 2020 Earnings Release)
Investors will be hoping for more good news in these interim results as the company said in September that it had made a good start to the new financial year. There have been some signs the big growth in gin sales is beginning to ease so the market will be watching out for that and also looking to see if sales in key emerging markets like China are still growing. Any news on progress with the £4.5bn return of capital programme announced last July will also be of interest. Diageo previously said it expected sales growth in the current financial year to be around 5%.
We currently list Diageo as a BUY
Unilever Plc (Q4 2019 Earnings Release)
As the owner of many internationally famous brands, growth in emerging markets in Asia and Africa has long been seen as a good potential source of growth for Unilever. It was therefore no surprise to see the shares drop away a little in December when the company reported a slowdown in sales in some of its markets. That means full year sales growth is expected to be below the 3.5% range it forecast previously. Investors will focus on any comments about prospects in emerging markets in the new financial year and what overall level of sales growth it expects.
We currently list Unilever as a BUY
BT Group Plc (Q3 2020 Sales and Revenue Release - Trading Statement)
BT’s shares have had a fairly dismal run over the past year, despite relief for many investors in December that Labour didn’t win the General Election which meant that BT’s infrastructure unit Openreach was safe from the threat of being nationalised. The company still remain under pressure to meet the government’s targets for rolling out fast broadband and in this third quarter update the market will be keen to see how the consumer division has performed over the Christmas period. Other issues such as the large pension deficit and the expected 24% drop in dividends next year are also weighing on the stock so any update on those will also be of interest. BT may also respond to media reports that it’s considering selling some of its Champions League TV rights.
We currently list BT as a HOLD
Royal Dutch Shell Plc (Q4 2019 Earnings Release)
Shell shares faced a tough second half of 2019 reflecting the rough commodity backdrop and industry in general. Despite this Shell held their own, posting better than expected results in September. Therefore investors will be quietly optimistic for this update. In a world which is ever-increasing its focus on climate change and the role of big businesses to help combat this, investors will likely be looking for new updates regarding any progress on renewable projects. Shell is already ahead in this transition but it is important that this momentum continues in order to satisfy growing sustainability requirements from investors.
We currently list Shell as a BUY
Other companies reporting this day include: EVRAZ (Q4 2019 Earnings Release – Trading Update) – SELL
St James’s Place (Q4 2019 Sales and Revenue Release) – BUY
Hargreaves Lansdown (Q2 2020 Earnings Release) – HOLD
SSE Plc (Q3 2020 Sales and Revenue Release)
The group is emerging from a difficult period of political and regulatory pressure, higher energy costs and unusual weather, much of which it had little control over. The share price recently hit a 2-year high supported by talk that the group could still be a possible bid target. The recent sale of its energy services business will mean the groups future focus will be on renewable energy and electricity transmission.
We currently list SSE 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.