The week ahead: Analysts expecting better by Informa
Monday 21 October 2013
Publishers–turned-events specialists will be in focus this week with Informa today and UBM tomorrow. Informa hasn’t had a great year and its healthcare business and events arm both underperformed.
Analysts at Peel Hunt think it might now be back on track and they predict its larger-scale events such as Cityscape Global “have been booking well”. Peel Hunt’s experts note that at the half-year stage, the group said it was trading “in line” with expectations and its outgoing chief executive also suggested that “cautious optimism over underperforming operations is now justified” so Peel thinks the update will not be amazing but shouldn’t lead to downgrades. Panmure Gordon’s analysts even think its management change will “ignite bid speculation”. Peel isn’t much keener on UBM which is searching for a new boss when David Levin leaves next year. Results/Updates: Informa, Senior.
Those clever techies who design the microchips in your smartphones will be in the spotlight tomorrow. Cambridge-based ARM Holdings will report its third-quarter update and analysts at Liberum Capital expect it good licensing growth but slowing royalties. Liberum predicts demand overall to have slowed so its royalty outlook will be hit by this “slowing device demand amidst a shift to the low-end, as well as gradual market share losses to Intel”. Liberum admits ARM is in an extremely strong position in the “post-PC world” this is already priced into the stock. It thinks rival Intel will gradually take about a 15-20 per cent share in both the smartphone and tablet markets which is also likely to affect ARM’s royalty progression.
Results/Updates: ARM Holdings, BHP Billiton, BP Marsh & Partners, Epistem, Eurasia Drilling Company, GKN, Petropavlovsk, Reckitt Benckiser, Spirit Pub Company, UBM, Whitbread.
Fashion group ASOS, a favourite with the likes of Hollywood star Sandra Bullock (pictured) will reveal another set of stomping numbers at its fourth-quarter results midweek. At its update in mid-September it reported strong sales growth. Andrew Wade at Numis, one of its house brokers, expects full-year, pre-tax profit of £53.6m and also hopes the group will update on strategy and Chinese expansion. Analysts at HSBC rate it overweight and last week hiked their target price to 7,160p – a huge jump from their previous 4,380p – ahead of Wednesday’s update.
Results/Updates: ASOS, British American Tobacco, Computacenter, GlaxoSmithKline, International Personal Finance, Laird, Home Retail Group, Mecom, Sports Direct International.
Debenhams has not had a good year so far, and Peel Hunt points out that “the company mishandled a number of investor communications, including failing to disclose a material prior-year pensions credit, which had boosted reported earnings”. But its full-year results on Thursday are expected to reveal pre-tax profit of £153m. The group has already said comparable sales growth came in at 2 per cent for the full year and margins were flat. The City wants to know more on the investments in stores, product, online and international. Numis is negative on the stock because of “the declining UK profitability” of the business.
Results/Updates: Avacta Group, AZ Electronics, Bloomsbury Publishing, Debenhams, Ensco, Go Ahead, ICON, Inchcape, International Ferro Metals, Kazakhhmys, Segro, Shire, St James’s Place, Stobart Group, Tracsis, Unilever.
By the end of the week it is time for the namesake of a volcano to step up and issue its third-quarter trading update. Vesuvius – once Cookson before it was split into two last year and the chemicals-focused part became Alent – is unlikely to cause investors to erupt. Although analysts at Numis said the steel industry has weakened which has hit the group. Vesuvius makes everything from pipes to valves for steel mills and foundries but there are pockets of the business that are still performing well such as truck production. Investec thinks the outlook for its markets shows there are “conflicting signals and little visibility”. While Scott Cagehin at Numis said: “Overall, market background would suggest the company should be on track to meet full-year guidance or even a touch ahead driven by higher foundry volumes.”
Results/Updates: APR Energy, Phoenix Group, SVG Capital, Vesuvius.
Rightmove house price data.
Public sector borrowing figures, US non-farm payroll and unemployment rate.
Bank of England Monetary Policy Committee minutes, British Bankers’ Association house purchase loans data.
Confederation of British Industry – trends data for total orders and selling prices and business optimism data, US weekly jobless claims, US new homes sales.
Third-quarter GDP figures, index of services, US durable goods orders, US consumer sentiment index.
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