Week Ahead: Pharmaceutical giants report; BoJo set to be crowned PM
Corporate news flow will pick up again next week, with results from the likes of ITV, GlaxoSmithKline, AstraZeneca, Fevertree and many others due before the August lull kicks in.
On Tuesday, posh mixers maker Fevertree will publish its first-half results. Deutsche bank said tough comps will weigh on the half, but it still expects strong growth.
"Net revenue +15.8% organically to £121.4m, EBIT +13.3% to £37.1m and EPS +13.5% to 25.8p," it estimated.
"With the UK growing at more normalised levels, we expect investors to be paying particular attention to 1) Fever-Tree's development in its overseas markets, particularly the US and Europe, as well as on 2) margins, which we expect to be down circa 70 basis points in the first half."
Elsewhere, pharmaceutical giants GlaxoSmithKline and AstraZeneca will be in focus.
Glaxo’s first-half numbers are due on Wednesday. UBS, which rates the stock at ‘neutral’, said: "HIV sales numbers and whether newer HIV products such as Juluca and Dovato can offset losses elsewhere in the dolutegravir portfolio (Tivicay, Triumeq) will likely be the key focus as investors look to work out when this business will stabilise.
"Investors will also be watching how new pharma products are performing including Trelegy, Nucala and Zejula."
On Thursday, H1 results from AZN will be out. UBS estimates second-quarter 2019 total revenues of $5.63bn versus consensus of $5.65bn, core operating profit of $1.19bn and core earnings per share of $0.61 versus consensus of $0.61.
"Investors will pay attention to updates on FDA discussions after recently published roxadustat CV safety analysis," it said. "Current concerns regarding cash flow generation remain the main focus - Q1'19 revealed negative free cash flow. With considerable exposure to emerging markets, especially China, we believe the market will be looking for any signs of tender based headwinds on the top-line (especially Crestor)."
Thursday also sees the release of half-year results from broadcaster ITV.
George Salmon, equity analyst at Hargreaves Lansdown, noted that 2019 has been another major sporting summer, but the tennis, cricket, football and netball has been spread across the other channels.
"Still, that doesn’t mean the group has nothing to shout about. Love Island has once again gripped the nation, breaking its own ITV2 viewing record by raking in an audience of over 6m," he said. "That, and the fact that over 20% of those viewers were streaming online, will surely feature in these results."
"However, how many people are watching is only one part of the equation. What investors will want to know is how much advertisers are willing to pay to get in front of the audience. Advertising trends have been weak since the Brexit vote, with ITV’s advertising revenue down 7% last quarter, so some positive news would be welcomed. Otherwise the onus will once again be on the Studios business to deliver the goods."
In the UK, the new Prime Minister will be revealed on Tuesday, with blond bombshell Boris Johnson the favourite for the top job.
The Share Centre said: "There will be a large number of ministerial resignations upon this with a Brexit biased cabinet forming. This week the pound reached new lows last seen in 2017 on rising fears of his Boris Johnson’s ‘do or die’ attitude to Brexit, although this was tempered by the latest parliamentary move to block a no-deal scenario."
Outside the UK, investors will be eyeing Markit PMI figures for the eurozone and the US, with the composite figures expected to show a rise in business confidence compared to previous months.
In addition, the European Central Bank will announce its latest interest rate decision on Thursday, with no change expected. However, "the statement is likely to sound dovish as economic indicators lately have generally been weak," the Share Centre said.
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