In South Africa, company releases are expected to taper down next week.
- Tongaat Hulett (Full-Year Results): Per the company, headline earnings per share (HEPS) are expected to deteriorate to a loss of between 622 cents and 640 cents compared to HEPS of 90 cents in FY20. EPS is expected to be substantially higher y/y, due to the ~R3.3 billion profit on the disposals of the Starch, Namibia and Eswatini operations. HEPS excludes the profit on disposal.
- Distell Group (Full-Year Results): At the nine-month mark, revenue and volumes were respectively tracking 8.1% and 6.0% ahead of 9M20. In SA, although 132 trading days were lost due to various bans on the sale of alcohol during the period, the business recovered well. Category performance continued to be driven by spirits and ready-to-drink (RTD) brands, adding to previous market share gains. In the rest of Africa, excluding BLNE countries (Botswana, Lesotho, Namibia and Eswatini), the group reported increased revenue and volumes up by double digits, driven by Kenya, Mozambique and Nigeria because of continued route-to-market investments. The international business performed well, driven by strong growth in single malts and a resilient Amarula performance in key markets. Bloomberg expects FY21 earnings to surge 242.5% y/y.
- Cie Financière Richemont SA (JO:CFRJ) (First-Quarter Trading Update): Fourthquarter and full-year results were well ahead of expectations. We will be focusing on whether or not sales momentum was maintained through the first quarter. Expectations are elevated given the reopening of several key economies over the past few months.
- From a corporate actions perspective, Tuesday marks the last day to trade Datatec (JO:DTCJ) and Primeserv Group (JO:PMVJ) to receive their most recently declared distributions.
- PSG Konsult (JO:KSTJ), Newpark REIT (JO:NRLJ), Zeder Investments (JO:ZEDJ) and Exemplar REITail (JO:EXPJ) will host AGMs in the upcoming week. Huge Group and Etion will also host GMs in the upcoming week.
A busy week is ahead in the US with second-quarter earnings season kicking off with bank and other financial stocks results. Guidance will be quite key – particularly from the banking space. According to FactSet, the estimated earnings growth rate for the S&P 500 in 2Q21 is 63.6%. Revisions have generally been higher – on 31 March the estimated earnings growth rate for 2Q21 was 52.1%.
- Bloomberg expects JPMorgan (NYSE:JPM) Chase’s 2Q21 earnings to more than double. According to Bloomberg, a record pipeline and strong client activity bodes well for 2Q21, as will asset and wealth flows. Loan demand remains the pivotal variable to watch, given the potential to power better net interest income in 2H21 on higher interest rates.
- Bank of America (NYSE:BAC) results could improve in the triple digits in 2Q21. Long-term opportunities in wealth and investment-banking franchises may be aided by near-term market momentum, as its digital evolution provides competitive and cost advantages.
- US Bancorp’s 2Q21 earnings are anticipated to jump 170.8% y/y. Earnings generation, strong capital and fortified credit reserves should help the bank capitalise on an economic recovery, though it faces near-term revenue headwinds with muted loan growth, uneven results in payments and declining mortgage fees. Payments, one-third of the bank’s revenue base, may improve as sale volumes rebound, though airline-related volume and corporate travel may take longer to recover.
- Look out for 2Q21 earnings from BlackRock (NYSE:BLK), with consensus expecting 18.3% growth in the bottom line.
- PepsiCo’s 2Q21 adjusted EPS may advance 15% y/y primarily reflecting a high single-digit rise in organic revenue and contributions from recent acquisitions. The operating margin is expected to remain stable if lower costs, attributable to acquisitions and Covid-19, offset possible input-cost pressure.
- UnitedHealth (NYSE:UNH) Group’s 2Q21 earnings are anticipated to contract 38% y/y, from a strong 1Q21 (+42.7% y/y). Premium increases from commercial and strong Medicare membership enrolment growth may offset some of the effect on the company’s operating profit growth projection associated with pandemic-related costs.
- Other companies including Morgan Stanley(NYSE:MS) (NYSE:MS), Charles Schwab (NYSE:SCHW), Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), and Delta Air Lines (NYSE:DAL) are expected to release results next week.
A quiet week is ahead in Europe and the Asia-Pacific region, with few significant releases anticipated.