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While you may have thought that this week was packed with company results, the best is yet to come. Next week, more than 60 of the biggest and most popular names on the London Stock Exchange report results in one form or another. But there’s one important sector to the UK economy that looks set to steal the show.
UK Housebuilders have been under the spotlight since the UK’s EU referendum in June 2016, when names in the sector fell as much as 44% from their closing price the day of the vote. Since then, stellar recoveries highlighted investor enthusiasm ahead of an anticipated ‘softer’ Brexit.
However, with negotiations in full flow, and with the Bank of England looking set to raise interest rates in the face of high inflation, there are still hurdles to negotiate.
Barratt Developments (BDEV) this week provided a preview of what’s to come from its peers next week. The London-focused UK 100 builder closed 2.1% higher on Wednesday after announcing it had made a record profit in the first half of its financial year. Will next week be as positive?
Persimmon (PSN) kicks things off on Tuesday, releasing its full year results. The UK 100 ’s largest housebuilder by market cap enjoyed a strong start to its financial year, seeing 2.0% and 1.8% rallies after its Q1 and Q2 trading updates, respectively and another 1.8% rally after Q2 results. The second half has been less fruitful, seeing 3.5% and 1.2% sell-offs after Q3 and Q4 trading updates. With shares trading 12% from 2018 highs, can the company see a repeat reaction similar to Q2 results?
Taylor Wimpey (TW.) is next, releasing FY results on Wednesday. It has seen similar results-based share price reactions to peer Persimmon during this financial year, rallying in the first half but falling after both Q3 and Q4 updates. However, the company has enjoyed an impressive bounce from February lows following the global market correction. Already 6% from lows, and with a further 10% to 2018 highs, can it continue its recovery?
Bovis Homes (BVS) rounds off the sector’s results on Thursday. The housebuilder has also seen a retreat from January’s 2018 highs, although has enjoyed an impressive bounce from support around September lows. 6% from 2018 lows, can it bridge the 11% gap to 2018 highs?
But it’s not just Housebuilders reporting next week.
Some of the other key names reporting include Associated British Foods (ABF), the Primark owner, which reports Q2 results on Monday. Will the company be able to recover following a 3.6% fall in January after its Christmas trading update?
Asia-focused lender Standard Chartered (STAN), hot on the heels of its four UK 100 peers this week, releases its full year results on Tuesday. Will it follow HSBC and RBS in falling after results, or will it join Lloyds and Barclays in climbing following strong results?
Broadcaster ITV (ITV; Wednesday) and advertiser WPP (WPP; Thursday) have extremely interlinked fortunes, with the latter reliant on performance of the former to capture business. Will they follow each other higher or lower next week?
Finally, embattled outsourcers Capita (CPI, Thursday) and Interserve (IRV; Friday) will be under increased scrutiny following the collapse of peer Carillion earlier this year.
While this has just given a sample of the earnings excitement of next week, you can enjoy a much more detailed view into the full range of numbers next week by signing up to receive our award–winning research offering. Our team of analysts will be here to decipher the releases before the market open, helping you to make sense of what’s going on.
Avin Nirula, Trader, 23 February 2018
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
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