US And European Releases Slowdown Next Week – 10.05.2021

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US and European releases slowdown next week

On the local front, look out for the following company releases next week:

  • AngloGold Ashanti (JO: ANGJ ) (1Q21 Results): At the FY20 mark, FY21 production guidance was set at between 2.7 Moz. and 2.9 Moz. AISC is expected to range from $1 130 to $1 230/oz. Capex is expected to increase to between $990 million to $1.14 billion.
  • Allied Electronics (Full-Year Results): The company expects headline earnings per share (HEPS) to fall by 21% to 29% y/y. HEPS excludes the profit on the Bytes UK demerger but was negatively impacted as Bytes UK was previously a material component of group earnings. HEPS was also affected by poor economic activity.
  • Long4Life (Full-Year Results): HEPS are expected to decrease by 24% to 32% y/y. While 1H21 was heavily impacted by Covid-19 trading restrictions, the group recovered well in 2H21. The trading performance was flat relative to 2H20, despite the continued impact of the pandemic on Personal Care and Wellness and alcohol bans on Beverages. Operating cash flows were excellent with significant improvements in the funds employed across all divisions. The cash balance is strong, notwithstanding the share buy-back programme undertaken during the year.
  • Transaction Capital (Full-Year Results): In a recent trading statement, management guided for core HEPS to increase between 47% and 52% y/y. Core HEPS from continuing operations are anticipated to be between 41% and 46% higher y/y. SA Taxi and Transaction Capital Risk Services (TCRS) were resilient despite Covid-19 disruptions, with pre-provision profits exceeding 1H20 levels. Most financial and operational metrics are nearing or exceeding pre Covid-19 levels.
  • Companies including Calgro M3 Holdings and Spear REIT will also release results.
  • From a corporate actions perspective, Tuesday marks the last day to trade AfroCentric Investment Corporation and Allied Electronics Corporation to receive their most recently declared distributions. Capital & Counties Properties, Labat Africa, Sun International, Trencor, Quilter PLC, Anglo American (JO: AMSJ ) Platinum, Liberty Holdings, Marshall Monteagle PLC, and Kumba Iron Ore will host AGMs in the upcoming week.

US earnings releases slow down significantly this week. To date, Bloomberg held that 423 out of 500 stocks in the S&P 500 index have released quarterly results, reporting a sales and earnings growth of 10.7% and 47.7% respectively. Overall 1Q21 sales beat expectations by 3.8% and earnings were ahead of consensus by 23.3%. Within the index, 87% of the companies reported better-than-expected earnings numbers, while 10.9% were a miss.

  • Marriott (NASDAQ: MAR ) likely experienced a decline in its 1Q21 US revenue per available room (revpar) in excess of the industry (STR: -24%), in line with a steeper decline in 4Q20 (-64.6% versus 51%). Worldwide declines in occupancy and revpar in January resembled those of 4Q20, yet Marriott’s US bookings over President’s Day weekend were the strongest for any holiday weekend since the pandemic began. Occupancy in China may rebound to 2019 levels this year, but it fell to 40% in January amid reinstated lockdowns.
  • Walt Disney (NYSE: DIS ) may post a 12% decline in 2Q21 revenue given continued park closings at Disneyland Paris and capacity restrictions elsewhere. The media and entertainment segment may benefit from stability in its linear networks, especially at ESPN, where sports are returning to a normal calendar, as well as sustained momentum in the direct-to-consumer business.
  • Another promising quarter is on the horizon for Tyson Foods (NYSE: TSN ), with 2Q21 earnings guided to increase 45.5% y/y (1Q21: +16.9% y/y). Higher average retail prices in beef, chicken, pork, and prepared foods should help Tyson Foods offset expected volume declines in the period for each segment. Elevated grain and transportation costs are potential headwinds.

In Europe, Merck KGaA, Allianz (DE: ALVG ) SE, Bayer AG (DE: BAYGN ), Burberry Group (LON: BRBY ) and The Sage Group (LON: SGE ) will publish results next week.

  • Allianz is expected to deliver a 1Q21 pre-tax operating profit of about €3.1 billion, up 33% y/y, which included €400 million of Covid-19 claims in Property and Casualty (P&C) and €300 million of investment losses in Life. Both P&C and Life are expected to post strong recoveries as the effects of the pandemic ease, with profits returning to levels seen in 2019.
  • Bayer AG will report 1Q21 results next week. Consensus expects better EBITDA and core EPS driven by higher profitability in Crop Science, although some of this appears to be anticipated by the market.
  • In a FY21 trading update, Burberry Group noted that comparable store retail sales for its 4Q21 were expected to grow between 28% to 32% y/y. For the full year, management expects group revenue to decline between 10% and 11% y/y and the adjusted operating margin to be in the range of 15.5% to 16.5%.

In the Asia-Pacific region, automakers Mazda Motor (T: 7261 ), Yamaha Motor and Honda Motor as well as Alibaba (NYSE: BABA ) will take centre stage next week.

  • According to Bloomberg, Yamaha Motor's (T: 7272 ) operating profit in the March quarter is forecast to grow y/y and sequentially. It suffered less from chip shortages, the Fukushima earthquake and harsh weather in the US than other automakers. It appears a recovery of the motorcycle business in emerging markets and surface mounter business in China is continuing, on top of strong demand for marine products and recreational vehicles in North America, as consumers escape from Covid-19 stress.
  • Honda Motor (NYSE: HMC ) is expected to beat its 4Q20 operating profit forecast, but profit may be lower than 3Q20 as automobile production was hampered due to chip shortages, the Fukushima earthquake, and harsh weather in the US. Risks beyond 4Q20 include further virus outbreaks, logistics problems such as parts shortages, and rising material prices.
  • Look out for Alibaba’s FY21 result. The company is likely to deliver 4Q21 strong sales growth; higher than the prior year’s low base of comparison. Consensus is expecting a 58% jump as business operations were severely disrupted by China’s pandemic lockdown last year. Alibaba may increase investments into new businesses and strategic areas substantially.

 

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