US And European Releases in Full Swing Next Week

  • Market Overview

On the local front, several heavyweights are scheduled to release results:

  • Anglo American (JO: AMSJ ) (Interim Results): Bloomberg expects headline earnings per share (HEPS) to jump to $3.83 per share (1H20: $0.72). From a production perspective, the miner delivered a mixed performance in 2Q21 with key misses in the iron ore and coal divisions. However, these were offset by a strong performance at PGMs, copper and diamonds operations.
  • Anglo American Platinum (Interim Results): Management has guided for HEPS to increase to between 17 300 cents and 17 795 cents (2 627 cents in 1H20). The expected increase in earnings was primarily driven by a 29% increase
    in the rand basket price and an increase in sales volumes from own production (excluding trading activities).
  • Kumba Iron Ore (Interim Results): Per management, HEPS are expected to surge by between 171% and 182% y/y. The increase in earnings for the period is largely attributable to higher average realised free-on-board (FOB) export iron ore prices and higher total sales volumes, partially offset by a stronger rand.
  • British American Tobacco (JO: SNHJ ) (Interim Results): Consensus expects earnings to contract 3.44% y/y. The volume decline is anticipated to remain around 3% – better than the sector overall. Pricing is expected to have remained robust, but
    sales mix could challenge volumes as economies reopen with more consumers switching to next-generation products (NGP) and hindering profit in the short term.
  • AECI (JO: AFEJ ) (Interim Results): For 1H21, HEPS are expected to surge between 115% and 125% y/y. Although the impact of Covid-19 is still prevalent it was less severe than in 1H20. Restructuring costs relating to AECI Chemicals did not
    recur and benefits of restructuring were realised in this period. There were also impairments and profits on business disposals in the base (not included in HEPS but impacting EPS).
  • ArcelorMittal South Africa (Interim Results): The company anticipates HEPS to improve by at least R4.15, from a headline loss per share of R2.39 in 1H20 to HEPS of R1.76 in 1H21.
  • Glencore (LON: GLEN ) is expected to release a 2Q21 production update.
  • Anheuser-Busch InBev SA/NV (Interim Results): The international brewer could extend its dramatic volume recovery in 2Q21 as economies reopen post-pandemic, though litres sold may still remain about 2% below 2Q19. Sporadic closings may
    hold back some outlook exuberance, particularly since South Africa was forced to curtail its reopening. Yet with the price mix now trending at or above 3%, the company could comfortably deliver double-digit organic growth in 2021. The 2Q21 results may still be affected by currency, though this pressure should ease as the year advances.
  • Liberty Two Degrees(JO: L2DJ ) and Capital & Counties Properties will also publish results.
  • From a corporate actions perspective, Tuesday marks the last day to trade Invicta Holdings , Nampak (JO: NPKJ ) Preference Share and Schroder European Real Estate Investment Trust PLC to receive their most recently declared distributions.
  • Santova, Mediclinic International (LON: MDCM ), Equites Property Fund, Finbond Group, South Ocean Holdings (JO: SOHJ ), YeboYethu, Allied Electronics Corporation (JO: AELJ ), Adcorp Holdings (JO: ADRJ ), Datatec (JO: DTCJ ), Sirius Real Estate, Raubex Group (JO: RBXJ ), Castleview Property Fund, Dis-Chem Pharmacies(JO: DCPJ ), Insimbi Industrial Holdings and Renergen will host AGMs in the upcoming week. Imperial (JO: IPLJ ) Logistics and Texton Property Fund will also host GMs in the upcoming week.

So far about 85% of US companies that have reported 2Q21 results have exceeded earnings per share (EPS) expectations and 90% of S&P 500 companies have reported a positive revenue surprise. This week, several big names across various sectors are scheduled to release results.

  • Bloomberg expects Ecolab’s 2Q21 earnings to recover 85.5% y/y (1Q21: -28.3% y/y) driven by higher prices and volumes. Greater demand for restaurants and lodging and easing social restrictions, especially in the US, could provide further growth opportunities for the Institutional & Specialty segment. Healthcare & Life Sciences demand should remain strong, though the base will be less weak in 2H21.
  • Bloomberg expects Apple’s 3Q21 sales to total $71.4 billion, with $16.9 billion in services and 43 million iPhones sold. Sales growth may exceed shipment gains across most products, aided by a stronger high-end mix. The late launch of the iPhone 12 and strong demand for the 5G model platform could propel Apple’s shipments through FY21.
  • Alphabet (NASDAQ: GOOGL ) ‘s core ad sales segment could see top-line growth accelerate to around 50% in 2Q21 off a low base and a sharp rebound in economic growth. YouTube ad sales growth may surpass consensus’ 65%, driven by high engagement and time spent on the platform.
  • Microsoft’s 4Q21 earnings are expected to jump 31% y/y on higher sales and margin expansion. Sales are anticipated to grow 16% y/y on Cloud growth driven by Azure and an IT spending rebound, which will likely help Dynamics, Azure and LinkedIn sales growth. Momentum in consumer PC sales may start moderating, though commercial PC revenue could start to pick up after a year of upgrade delays.
  • Visa (NYSE: V ) earnings are expected to increase 27.1% y/y. Card-volume gains can accelerate over the next few quarters on more stimulus, retail, and restaurant reopenings, the return of consumer travel and easy y/y comparisons. Once economies return to normal, top-line gains may surpass 10% to 12% with the build-out of new payment types including crypto and B2B, and additional credentials from emerging issuers.
  • Mastercard’s 2Q21 revenue is expected to grow 31% y/y on 32% payment-volume growth and consensus is looking for diluted EPS to reach $1.74. Cross-border spend may have downside, forecast to grow 59% on easy comparisons, but still
    constrained by economies with low vaccination rates. Top-line growth could outpace Visa’s, given a one-quarter lag in Visa’s reported volume during this pivotal quarter.
  • Facebook’s sales growth is poised to accelerate in 2Q21 amid a shift of ad budgets to digital and increased engagement. Ad pricing growth may outpace that of social media peers amid traction with small businesses using its self-serve platform for shoppable ads and acquiring new customers. ARPU expansion may be above historic trends, driven by demand from advertisers’ shops and Instagram checkout.
  • Merck’s 2Q21 earnings and revenue are projected to grow 9.3% and 13.7% respectively. With a resurgence in Gardasil volume in 2Q21, along with continued growth in Keytruda sales, Merck may have room for a FY21 guidance increase. Margin evolution in 2Q21 is complicated by the tug-of-war between a favourable comparison and the drag on margin from the Organon spinoff.
  • Look out for 2Q21 results from Comcast (NASDAQ: CMCSA ). Comcast’s core connectivity business continues to grow, with consensus for 294 000 broadband subscriber gains in 2Q21, a solid result in a seasonally weak period. NBC has also been enjoying an upswing, with revenue set to jump 25% thanks to the resurgence of TV ads, which will get a further boost from the Olympics in 3Q21.
  • Yum! Brands’ 2Q21 systemwide same-store sales may have surged 20.6% as International markets lapped easy comparisons due to the pandemic and US results were boosted by stimulus-cheque spending. Comparable store sales are projected to have risen 27.3% at KFC, 9.4% at Pizza Hut, 15.4% at Taco Bell and 23.4% at Habit Burger. Strength in Canada, the UK, Australia, and Japan may be partly offset by weakness in India due to Covid-19 restrictions.
  • Amazon (NASDAQ: AMZN ).com’s 2Q21 earnings may be buoyed by more than 30% growth for Amazon Web Services (AWS) and a 23% gain in its online business, aided by continued gains in digital shopping and the introduction of Prime Day into 2Q21. Third-party seller fees may increase by more than 30% as the marketplace strengthens and take-rates rise with added services.
  • Other major companies expected to release results include 3M (NYSE: MMM ), Mondelez (NASDAQ: MDLZ ) International, Starbucks (NASDAQ: SBUX ), Pfizer (NYSE: PFE ), McDonald’s Corp, Ford Motor (NYSE: F ), PayPal Holdings, Under Armour, Hilton Worldwide Holdings, Molson Coors Beverage, Caterpillar (NYSE: CAT ),
    Procter & Gamble, and Colgate-Palmolive (NYSE: CL ).

European luxury goods companies (LVMH (PA: LVMH ) Moët Hennessy Louis Vuitton, Christian Dior SE, Kering (PA: PRTP ) SA and Hermès International) will take centre stage next week. The biggest challenges to global luxury-goods players could emerge in the next few quarters, when growth gains are likely to be led by those companies best-placed for the return of tourism – particularly when China’s borders reopen for international travel.

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or

100