The week ahead: Improved Tesco is back in favour
Monday 03 December 2012
Construction firm Balfour Beatty will be trying to alleviate analysts' fears at an investor day. The engineering-to-construction group issued a profit warning at its third-quarter update recently, so analysts will want to hear how it is correcting problems in its European rail and UK construction businesses. Numis Securities' Howard Seymour said: "Coming ahead of the Autumn Statement it will be difficult to be emphatic on the outlook for government spending, but self-help measures should be a key component of the day."
The record wet summer did nothing to dampen the spirits of beer drinkers at Greene King's pubs. Its half-year results are expected to include profits up by 7 per cent. Numis Securities analysts are forecasting pre-tax profit of £82.6m. They expect its managed pub trade, which makes up 62 per cent of group profit, to be strong and margins to be up slightly. But Numis has kept its rating of the group at hold with a share-price target of 650p.
Results/Updates: Anite, Dolphin Capital, ITE, Northgate, Reneuron Group, TUI Travel, Vianet Group.
Tesco is finding some fans again. It fell out of favour with investors after a profit warning, but analysts are starting to fancy it again ahead of its management statement on Wednesday.
Jefferies' scribes think it is time to buy Tesco, and have given it a 400p share-price target. They said: "As we move into 2013, its UK stores look much improved. A return to earnings growth and sharply stronger cash generation should be a useful valuation driver in the coming year." Panmure Gordon's Philip Dorgan also rates it a buy and gives a target price of 440p.
Results/Updates: Brewin Dolphin, First Property Group, Innovation Group, Jelf, Numis, Sage Group, Stagecoach Group.
The luxury-goods sector has had its ups and downs as fears of a slowdown in the Chinese market caused growth to falter. The Somerset-based bag maker Mulberry has been trying to pitch itself more upmarket, and in the process has lost sales. The news sent its share price south in October. On Thursday it will update the market with its half-year results, and with better news coming out of China, a key area for growth for the brand, analysts expect a clearer indication of margins.
Barclays' luxury lover Helen Norris remains positive on the long-term expansion of the brand internationally, but warns that the Christmas trading will be the true test. She gives it a hold rating and a price target of 1,250p.
Shares in luxury-goods brands have outshone retailers in the past year, according to the trading house Banc De Binary. Luxury retailers' shares outperformed both mid-market and budget retailers with luxury up 16 per cent, compared to 11 per cent for the mid-market sector over the year.
Results/Updates: Caretech, DS Smith, Falkland Islands, Graphite Enterprise, Intertek Group, Micro Focus International, OMG, Premier Farnell, PZ Cussons, Standard Chartered.
Attention turns to bricks and mortar as housebuilders Berkeley Group and Bellway Homes update the market. Numis Securities' analysts expect solid half-year results from Berkeley and rate it a buy with a price target of 1,650p. The south-east housing market is still booming, and Berkeley has been reaping the rewards.
Numis's Chris Millington thinks Berkeley is "one of the most attractive housebuilders given that its margins have the potential to rise significantly". But he is less keen on Bellway. He gives it a hold rating with a price target of 1,012p and said: "The shares are unlikely to rise materially … in the short term until we get more clarity over the 2013 Spring selling season."
Results/Updates: Polar Capital Holdings.
Lloyds Business Barometer, Manufacturing Purchasing Managers' Index, 10-year and 30-year Bond Auction, British Retail Consortium Sales Monitor, EU Retail Sales.
Construction Purchasing Managers' Index, British Retail Consortium Shop Price Index, ECOFIN Meetings.
Autumn Statement, UK Services Purchasing Managers' Index, EU Unemployment Rate, US Factory Orders.
UK Trade Balance, Asset Purchase Facility; Monetary Policy Committee Rate Statement, Official Bank Rate, European Central Bank Press Conference, US Job Cuts Update, US Unemployment Claims.
UK Manufacturing Production, UK Consumer Inflation Expectations, UK Industrial Production, US Non-Farm Payrolls.
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