SA Releases Picking Up Pace

  • Market Overview

SA releases picking up pace

Dual-listed miners take centre stage locally as they release results next week:

  • BHP Group (JO: BHPJ ) (Interim Results): The market is looking for adjusted earnings per share of $1.91 on revenue of $31.2 billion. We expect good support for revenue and profitability from high commodity prices. In a previous update, FY22 production guidance for iron ore, energy coal and nickel were left unchanged, with copper production trending towards the lower end of the guided range and metallurgical coal guidance reduced because of significant wet weather impacts and Covid-19 related labour constraints. Completion of the proposed merger with Woodside Petroleum (ASX: WPL ) is expected in 4Q22.
  • Pan African Resources (JO: PANJ ) (Interim Results): Despite certain headwinds at various mines, the group previously said it remains on track to meet full-year production numbers, with a significant improvement in debt providing further flexibility. Near-term support for the price of gold is also likely to encourage the company’s prospects in the short to medium term.
  • Glencore (LON: GLEN ) (Full-Year Results): Bloomberg consensus is looking for revenue growth of 51.8% and a doubling of adjusted earnings per share to $0.68. EBITDA is expected to increase 9.8% to $21.2 billion. Management kept production guidance for FY22 unchanged during a recent update and noted that any possible changes would likely be underlined in April, together with a 1Q22 production report.
  • Sibanye-Stillwater (Full-Year Results): The market is looking for adjusted earnings per share growth of 28.9% to R14.53 off revenue of R164 billion (+28.5%). The company continues to pursue an expansion strategy that is against the trend in the rest of the sector, where the focus is on cash returns to shareholders. This signals management’s intent to continue growing the business, but also adds execution risk to the name.

Other companies expected to release results include DRD Gold , Emira Property Fund (JO: EMIJ ), Gold Fields (JO: GFIJ ), South32 and Truworths International (JO: TRUJ ). Dis-Chem Pharmacies is set to release a 4Q22 Trading Update.

Coronation Fund Managers, Distell Group (JO: DGHJ ) Holdings, Nampak Limited (JO: NPKJ ), Redefine Properties (JO: RDFJ ), Reunert, The SPAR (JO: SPPJ ) Group and Tiger Brands Limited (JO: TBSJ ) will host AGMs in the upcoming week.

US earnings season continues into the new week with numerous companies across various sectors releasing results. At the time of writing, 343 companies in the S&P 500 have reported results for the quarter through December so far, with 262 boasting a positive EPS surprise (77%) and 235 (69%) reporting a positive revenue surprise for 4Q21. So far, aggregate earnings have grown ~27%, revenue is up 16% y/y.

  • Akamai Technologies (NASDAQ: AKAM ) is expected to grow revenue by 6.2% to $898.8 million in 4Q21 with adjusted earnings per share anticipated to grow 70.5% to $1.42. Akamai is well positioned to meet the growing demand for network and security capabilities in a single-edge platform. It is believed that the company could achieve sales growth of over 11% in the next few years..
  • Ecolab (NYSE: ECL ) expects 4Q21 earnings to grow by 3.1% y/y, with double-digit growth expected for the full year. According to Bloomberg Intelligence, the company’s focus on the increasing global demand for food, clean water and energy is expected to significantly drive long-term revenue and earnings growth for the company, which continues to benefit from recovering restaurant and hotel demand.
  • Bloomberg consensus calls for revenue growth of around 48.1% for NVIDIA (NASDAQ: NVDA ) in 4Q21, amid continued expansion of GPU servers and chip use as artificial intelligence tools gain traction for many enterprises. The company’s recent withdrawal of its proposed deal for ARM, though, is likely to set back its plan to disrupt the CPU market in the near to medium term.
  • Walmart’s FY22 earnings are forecast to increase 16.1% y/y, thanks to its size and ability to keep consumer prices low. The company remains well-positioned to navigate rising inflation levels and general economic uncertainty, as well as to defend its market share. A sustained uptick in e-commerce and alternative revenue are aiding growth.

Other notable releases in the week ahead include Cisco Systems (NASDAQ: CSCO ), Garmin, Hilton Worldwide Holdings and Kraft-Heinz.

European results continue through next week with results expected from Allianz (DE: ALVG ) SE, Heineken, Kerry Group, Nestle SA (SIX: NESN ), Reckitt Benckiser (LON: PSN ) and Ubisoft Entertainment, among several others.

  • Luxury brands Kering (PA: PRTP ) SA and Hermès International will also release results. FY21 revenue for Kering SA is expected to rise 30.1% y/y from a negative FY20 (-17.5% y/y), as a result of easing coronavirus restrictions in Europe and a more stable American consumer environment.
  • In a previous update, management guided for Kerry Group’s FY21 adjusted EPS to grow by between 10% and 13%, in constant currency. Bloomberg consensus, however, calls for growth of around 18.2% y/y, amid a recovery in food-service customer numbers.
  • Nestlé will release FY21 results next week. Adjusted revenue and earnings are forecast to increase 2.5% and 7.4% respectively, due to an improvement in pricing after the recent asset restructuring. Continued inflationary pressures, however, are adding risks to the business.
  • Reckitt Benckiser seeks EPS growth of over 80% y/y, largely owing to increased productivity and higher cost savings. At its 3Q21 results, management upwardly revised its expectations for FY21, with like-for-like net revenue expected to grow between 1% and 3% (previously: 0% and 2%).

In the Asia Pacific region, Alibaba (NYSE: BABA ) Group Holdings and Woodside Petroleum are set to publish results next week.

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