Companies reporting w/c 3 August

We gives our thoughts on what to expect from companies announcing results week commencing 3 August 2020.

Monday

HSBC Holdings Plc (Q2 2020 Earnings Release)

With dollar interest rates falling, the coronavirus hitting across the globe and a potential difficult path to negotiate between Hong Kong and Beijing, the background is clearly challenging reflected in the share price hitting a ten year low. The latest bout of US / China tension has added further pressure. Investors will be expecting good levels of business for its investment bank, but will be concerned over the potential for an increase in bad debt provisions. Any further news on management restructuring plans aimed at lowering its cost base will also be worth noting.

We currently HSBC as a HOLD

Tuesday

BP Plc (Q2 2020 Earnings Release)

As peers have cut back on dividends with the very low oil price environment, many investors are expecting BP, which so far has held out to follow the rest, especially after the group reduced its long-term forecasts for oil prices and set aside billions for write-off. A debt issuance at the start of the crisis to enable the dividend pay-out may now be frowned upon and a focus on cutting the debt load and further in costs should be a new priority.

We currently list BP as a BUY

Diageo Plc (Q4 2020 Earnings Release)

Shares in global drinks group Diageo have shown their defensive qualities this year with an above average performance. That is notable given that in April the company reported that its operations had seen a significant impact due to the lockdown measures imposed by many governments around the world and declined to give any full-year guidance. Investors will be keen to hear if there are still signs of a return to normal as restrictions have since been eased, especially in the key markets of China and North America.

We currently list Diageo as a BUY

Other companies reporting this day include:

Direct Line Insurance Group Plc (Q2 2020 Earnings Release) - No view
Babcock International Group Plc (Q1 2021 Sales and Revenue Release – Trading Statement) - No view

Wednesday

Legal & General Group Plc (Q2 2020 Earnings Release)

L&G was one of the exceptions in the industry when it decided to carry on paying a dividend when others around them were cutting amid regulatory pressure, they offer a yield close to 8%. The big question is whether they will continue to hold out, an update in June suggested that business had remained resilient but lower overall market valuations will hit fee income in certain parts of the business. The balance sheet and capital ratio should remain strong and the group recently said that it will take advantage of lower market interest rates to tap into some debt issuance to fund for further growth.

We currently list L&G as a BUY

Morgan Sindall Group Plc (Q2 2020 Earnings Release)

Morgan Sindall is involved in a range of activities including construction and infrastructure, office fit out, property services and urban regeneration. In common with most of its peers it said in March that the coronavirus outbreak had had a material impact on its business, with a number of construction sites closed, leading to the cancellation of the final dividend. In May the news was better in that many of its operations had remained in action, although some at a lower level of productivity. Investors will be keen to hear how its construction business is performing and how quickly it is burning through its cash.

We currently list Morgan Sindall as a BUY

SEGRO Plc (Q2 2020 Earnings Release)

While many commercial property developers have struggled in recent times Segro has benefited from the growth of online retailing and the subsequent increased demand for warehousing. In these interim figures the market will be looking for an update on the value of the assets, rental collection levels in July and any news on how the company might invest the £680m of new capital it raised in June for its development pipeline.

We currently list SEGRO as a HOLD

Other companies reporting this day include:

Hill & Smith Holdings Plc (Q2 2020 Earnings Release) – BUY

Thursday

ITV Plc (Q2 2020 Earnings Release)

Advertising revenue has been under pressure and changes to the way consumer goods companies advertise in the future may impact further especially relating to travel companies and airlines. The increasingly important Studios business had to pause productions as a result of the virus and investors will be expecting an update on the situation. The group like many have had to take cost cutting measures. The share price has remained under pressure and sits once again close to a five-year low.

We currently list ITV as a HOLD

Other companies reporting this day include:

Mondi Plc (Q2 2020 Earnings Release) - BUY


Friday

Standard Life Aberdeen Plc (Q2 2020 Earnings Release)

The merger back in 2017 created one of the largest asset managers, with a focus on growing its international offering in the Middle East and Far East. Its flagship Global Absolute Return Strategies fund has experienced fund outflows and investors will be hoping for that trend to have slowed. In May the group reported assets under management of £490 billion and with continued volatility in global markets followers of the company will be keen to see if that amount has risen.

We currently list Standard Life as a HOLD

Other companies reporting this day include:

Hikma Pharmaceuticals Plc (Q2 2020 Earnings Release) – BUY
Hargreaves Lansdown Plc (Q4 2020 Earnings Release) - 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.

 
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