US and European results continue to gain momentum next week and local releases are also picking up. These companies are scheduled to release operational updates next week:
- Sasol (JO:SOLJ) is scheduled to release a 3Q21 business, sales and production update. Management expects a strong operational performance for FY21, with volume growth across most divisions, fixed cash cost to remain in line with inflation, net debt-to-EBITDA ratio to be below covenants, and capex between R18 billion to R20 billion. This assumes an exchange rate of between R14.50 and R15.50 to the US dollar and average Brent crude oil price of between $40/bbl and $60/bbl.
- Glencore (LON:GLEN) is expected to release 1Q21 production numbers. Management guided for an increase in production for nickel (+6% y/y), zinc (+7% y/y, coal (+7% y/y), cobalt (+28%) and ferrochrome (+29% y/y) in FY21. However, production for copper (-3% y/y) is forecast to decrease.
- Implats (JO:IMPJ) will also release a 1Q21 production report. The miner guided for FY21 refined production to between 3.2 Moz. to 3.46 Moz. of 6E ounces (previously: 2.8 Moz. to 3.4 Moz.). Group unit costs are expected to be between R14 600 to R15 100 per 6E ounce (previously: R14 500 to R15 500 per 6E ounce).
- From a corporate actions perspective, Tuesday marks the last day to trade Exxaro (JO:EXXJ) Resources to receive its most recently declared distribution. British American Tobacco, Glencore, Steinhoff International Holdings (JO:SNHJ), and Lighthouse Capital will host AGMs in the upcoming week. Anheuser-Busch InBev SA will host a GM this week.
Another busy week is expected in the US across various sectors, with the focus being on the internet/media space (Facebook (NASDAQ:FB), Alphabet (NASDAQ:GOOGL), Amazon.com (NASDAQ:AMZN), eBay (NASDAQ:EBAY) and Twitter (NYSE:TWTR)). For 1Q21, the S&P 500 is estimated to deliver earnings growth of 23.8%. As of last week, eight sectors led by the financial sector have higher earnings growth rates or smaller earnings declines (compared to 31 March) due to upward revisions to EPS estimates and positive EPS surprises. The lifting of quarantines. Airlines have raised over $100 billion in cash from equity, grants, and debt that, if spent, will hurt balance sheets and drag on results.
- NXP (NASDAQ:NXPI) Semiconductors’ 1Q21 earnings and revenue are projected to rally 58.9% and 26.6% y/y aided by strong demand. Stronger industrial and mobile demand in 2H21 could also boost FY21 sales.
- Tesla (NASDAQ:TSLA) delivered 185 000 vehicles globally in 1Q21, exceeding the 180 000 marks in consecutive quarters, although price reductions in various markets suggest demand remains tenuous. Installed capacity stands at 1.05 million units, implying 1Q21 utilisation below 80%, with additional plants under construction in Austin, Texas and Berlin.
- Eli Lilly’s 1Q21 results are anticipated to be strong, with sales expected to rise by 20% for the remainder of 2021 driven by Covid-19 antibody sales, with the guidance of $1 billion for 1Q21. Jardiance and Trulicity are both showing strong volume growth in the US.
- Facebook’s ad impressions growth could exceed 1Q21 consensus of 22% by 300bps to 500bps, driven by increased engagement across its family of apps during the pandemic. Instagram remains a driver of revenue growth as users spend an average of 11 hours a month on the ap p, more than any other social media platform.
- Despite fears of a slowdown in cable broadband growth, Comcast (NASDAQ:CMCSA) likely saw sustained momentum, with consensus of almost 400 000 data subscriber gains in 1Q21. Full-year growth could be in line with 1.4 million in 2019. Sky will be challenged in 1H21 with 1Q21 revenue declining, but 2H21 could be stronger. Peacock will also be a key focus.
- Bloomberg expects Alphabet’s 1Q21 numbers to improve 55.8% y/y. A sharp rebound in spending by travel and hospitality companies may accelerate sales growth in Google’s core ad business, while YouTube’s high average time spent may bolster ad impressions growth compared to other social media platforms.
- According to Bloomberg, Visa (NYSE:V) could top 2Q21 consensus revenue on better-than-expected consumer spending in March, sparked by stimulus and less social distancing. Large clients Chase, Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC) saw 1Q21 card volumes increase at a rate 8 to 9 percentage points faster than 4Q20 levels. Activity from non-bank issuers, such as Cash App, Coinbase and Chime, could also be boosted by stimulus deposits and cryptocurrency trading.
- Yum! Brands’ 1Q21 same-store sales may have risen 8.6% y/y, boosted by a soft base. Domestic comparable-store sales increased by mid-teens in the first few weeks of January across all four brands, but management said the impact seemed to be short-lived.
- Look out for 1Q21 results from Merck with forecasts guiding for earnings to grow 8.5% y/y, as a recovery in surgical procedures and improved vaccination rates will have helped Bridion and Gardasil do better. The ascent of main revenue driver, Keytruda, has continued at pace.
- Ecolab’s volumes could decline in 1Q21 as the company must still contend with the impact of the pandemic. Ecolab (NYSE:ECL) may still see strong growth in its healthcare and life sciences units with potential stabilisation in its restaurant, hotels, and entertainment facilities businesses, though still below levels a year ago.
- During 1Q21 Mastercard (NYSE:MA) could meet estimates for flat revenue, after a 7% drop in 4Q20, amid faster US volume gains and recovering cross-border spending. Cross-border data through February showed a recovery in high-yield volume that excludes intra-Europe transactions.
- Amazon’s 1Q21 earnings may be boosted by ~30% growth for Amazon Web Services (AWS) and the online business (+38%), aided by stimulus cheques and strength in digital shopping. Third-party seller fees may continue to grow as the marketplace strengthens.
- Other major companies expected to release results include General Electric (NYSE:GE), Starbucks Corp (NASDAQ:SBUX), Mondelez (NASDAQ:MDLZ) International, Boeing (NYSE:BA) Co, Ford Motor (NYSE:F), Caterpillar (NYSE:CAT), Molson Coors Beverage, Gilead Sciences (NASDAQ:GILD), Exxon Mobil (NYSE:XOM), Apple (NASDAQ:AAPL), and Colgate-Palmolive (NYSE:CL).
Along with other notable stocks, European banks including HSBC Holdings (LON:HSBA), Lloyds Banking Group (LON:LLOY), Deutsche Bank (DE:DBKGn), Standard Chartered (LON:STAN), BNP Paribas (PA:BNPP), UBS Group and Barclays (LON:BARC) PLC will take stage centre next week.
- Standard Chartered's (LON:STAN)’s net interest margin may narrow to below 1.2% in 1H21, though 2021 provisions could moderate lower compared to consensus. The company’s plan to combine retail banking, private banking and wealth management is a welcome first step to shift from net interest income to more non-interest income.
- Bloomberg expects Lloyds Banking Group’s 1Q21 earnings to increase 38.7% y/y. According to Bloomberg, Lloyds Banking Group’s challenges remain the same: revenue growth, notably other income, as net-interest margin stabilises and net-interest income slowly recovers from the bottom.
- BP’s 1Q21 results could experience an improvement in strong operating and trading performance bolstered by significantly higher commodity prices. The company achieved its net-debt target of $35 billion early, largely due to $4.7 billion of divestment proceeds. The pandemic’s impact will continue to affect downstream, with sales vulnerable to Covid-19 restrictions in key markets.
- While Royal Dutch Shell (LON:RDSa) PLC’s 1Q21 earnings are guided to grow 6.5%, revenue is set to fall 2.6%. Management expects 1Q21 production in integrated gas of between 900 000 and 950 000 barrels oil equivalent/day while 1Q21 output in the upstream division is guided to between 2.4 million and 2.6 million barrels oil equivalent/day.
- Novartis’ 1Q21 earnings and revenue are expected to increase 1% and 3.2% respectively. FY21 sales guidance was slightly below expectations and a notably reduced operating-income goal suggests a lower FY21 margin compared to initial expectations.
- AstraZeneca (LON:AZN) is expected to be one of the stars of 1Q21 in terms of growth, much of it driven by underlying performance with some help from currency. Sales are being fuelled by seven drugs, with Calquence and Fasenra recording the largest increases. The weaker dollar will further help boost sales.
- Look out for results from Puma SE (LON:0NQE), GlaxoSmithKline (LON:GSK), BASF SE (DE:BASFN), TOTAL SE, and Airbus SE.
In the Asian-Pacific region, New China Life Insurance and Komatsu will publish results.