The Week Ahead: Bovis to continue builders' recovery
Monday 08 July 2013
House builders are officially having their best time since the downturn of 2007. The homes market has been boosted by an improving economy, easing lending conditions and the Government's Help to Buy initiative and so are the housebuilders shares as safe as houses? Bovis Homes' trading update today follows peers who gave strong updates last week. Bovis, too, is expected to report strong growth in reservations and sales. Panmure Gordon's upgraded their forecasts for the full year to a pre-tax profit £72.1m. But analysts at Numis think there are now companies with "better growth and valuation attractions" so they only rate it a hold ahead of today's statement.
Results/Updates: Bovis Homes, RM.
Tomorrow is a big day for Marks & Spencer because the City, its investors and anyone else with a passing interest in the high street bellwether will want to see how its new clothing ranges are faring when it updates on its first quarter on Tuesday. The retailer has been losing market share and investors have become concerned. Chief executive Marc Bolland brought in new style director Belinda Earl, pictured below, previously at Jaeger and Debenhams, to improve the appeal of its clothes. Analyst Andrew Wade at Numis thinks recent trade will have been mixed over the early part of the summer and they expect sales for the period compared to the same period last year to be in negative territory for clothing – down 1 per cent – but up 1.5 per cent for food. Analysts at Panmure Gordon expect that tomorrow's trading update will be in line with expectations, but they think improvements will take place in the medium term and they forecast full-year, pre-tax profit earnings for 2014 at £703.3m compared to the consensus of £675m.
Results/Updates: Marks & Spencer, Interserve, SIG, Smith News, XP Power.
Burberry is best known for its trench coats, but its new beauty range and perfume arm will be getting a lot of attention on Wednesday. HSBC's analysts last week upped their rating to buy from neutral because they think the company's decision to take control of the beauty business in house, expand its accessories lines and streamline its supply chain is paying off. The brand, which has hired actress Sienna Miller and her fiancé Tom Sturridge as the faces of its latest campaign, no longer trades at a premium to the luxury goods sector, HSBC analyst Erwan Rambourg said. Analysts at Berenberg expect the "ongoing sales outperformance in mainland China" to help the group and expect sales growth of 6 per cent with sales at £280m. The first-quarter update will be the first for new finance director Carol Fairweather.
Results/Updates: Barratt Developments, Booker Group, Burberry, Halfords, Icap, JD Wetherspoon, UK Mail Group
How sweet will Associate British Foods (ABF) update be on Thursday? The Primark to sugar owner is expected to be effected by sugar beet pricing that has hit the sugar industry recently. Analysts at Canaccord Genuity think there is significant risk that ABF will have to pay more for beet which will hit profitability. Canaccord is also concerned about the growth at its Primark clothing chain. They think the unseasonably cold spring and poor start to the summer could see Primark's recent trading "disappoint," with underlying sales growth set to slow to 6 per cent it rates the group a sell. Analysts expect the company's third-quarter update will show overall profits to be flat for the second half.
Results/Updates: Associated British Foods, Ashmore Group, Avanti Communications, Balfour Beatty, Hays, Premier Oil, Supergroup.
Investors in credit rating and data company Experian will be hoping there will be an update about its South American division. Analysts at Canaccord Genuity think the group has been hit by weakness in Brazil and they rate it a sell with a 985p price target. Across its other markets things will have fared better. If Brazil is bad, investors will be comforted by better US results and overall it should be in line with expectations.
Results/Updates: Experian, Robert Walters, Charlemagne Capital.
Eurogroup meeting, EU unemployment rate, US consumer credit.
British Retail Consortium retail sales monitor; Royal Institution of Chartered Surveyors – house price balance; UK industrial and manufacturing production; National Institute of Economic and Social Research – GDP estimate, UK trade balance; EU Ecofin meeting; EU retail sales; US Small Business Index.
US 10-year bond auction; US crude oil inventories; US wholesale inventories.
ECB monthly bulletin; US 30-year bond auction; US federal budget balance; US unemployment claims.
Bloomberg economic survey; construction output; EU industrial production.
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