Week Ahead: A Quiet Week On The Releases Front With A Few Notable Stocks

  • Stock Market Analysis

A quiet week on the releases front

Locally, only a few notable stocks will be released next week:

  • Rand Merchant Investment Holdings (JO: RMIJ ) (Full-Year Results): Normalised earnings per share are anticipated to grow by between 10% and 20%. Headline earnings per share (HEPS) are expected to increase 45% to 55% y/y. The main reason for the significant increase in headline earnings was the stabilisation of long-term interest rates in SA and the UK, which resulted in materially lower economic assumption adjustments at Discovery (JO: DSBPp ).
  • Remgro (JO: REMJ ) (Full-Year Results): HEPS from continuing operations are expected to increase by between 61% and 71%. HEPS from total operations are expected to decrease by between 6% and 12%. FY20 HEPS (continuing operations) were significantly impacted by Covid-19 and a once-off donation of R500 million to The South African SME Relief Trust. The increase in HEPS from continuing operations came from a recovery in the earnings of most investee companies, but was partly offset by a lower contribution from Mediclinic (LON: MDCM ).
  • Investec (JO: INLJ ) will also release a 2Q22 trading update
  • From a corporate actions perspective, Monday marks the last day to trade Aspen Pharmacare Holdings (JO: APNJ ), Cashbuild (JO: CSBJ ), Compagnie Financière Richemont SA (JO: CFRJ ), Clientele (JO: CLIJ ), DRDGOLD (JO: DRDJ ), Discovery Holdings Ltd (JO: DSYJ ), Fortress REIT, Grindrod (JO: GNDJ ), Impala Platinum Holdings (JO: IMPJ ), Motus Holdings (JO: MTHJ ), Santam (JO: SNTJ ), Sasfin Holdings (JO: SFNPp ), Transpaco (JO: TPCJ ), and Truworths International (JO: TRUJ ) to receive their most recently declared distributions.
  • Omnia Holdings (JO: OMNJ ) will host AGMs in the upcoming week.

Another quiet week is expected offshore, with only a few big stocks anticipated to release results next week. In the US look out for the following releases:

  • An acceleration in enterprise spending could drive Adobe’s (NASDAQ: ADBE ) 3Q21 sales growth to above consensus of 21%, partially aided by a rebound in the Digital Experience segment, which is more exposed to an economic recovery. Bloomberg anticipates that the Digital Experience segment could expand above 25%, while the Digital Media unit may report sales growth over 20%, fuelled by greater demand for electronic documents.
  • FedEx’s (NYSE: FDX ) 1Q21 EPS growth is expected to slow down to 3% amid rising freight costs. Freight transportation and logistics providers are facing increased inflationary pressure and service issues from the tight labour market. Revenue is anticipated to grow 13% supported by the robust pricing environment and solid volume growth.
  • Look out for 4Q21 results from Costco Wholesale (NASDAQ: COST ). Costco reported 9.4% same-store sales growth in 4Q21 (excluding fuel and foreign exchange) compared to consensus of 7.2%, implying that the company can retain a high portion of market share gained during the early stages of the pandemic. E-commerce expanded 8.9% in the 4Q21 against difficult comparisons and as consumers returned to stores.
  • Nike (NYSE: NKE ) is expected to kickstart 1Q22 on a positive note, with earnings anticipated to grow 16.9% y/y. Nike’s strength looks set to persist in FY22, following its new 2025 outlook and a better 4Q21, as investments aimed at connecting with customers continue to pay off. Nike’s increased focus on digital and direct-to-consumer is a key driver of revenue and gross-margin potential, with sales expected to climb by high-single to low-double digits through 2025.

A quiet week is ahead in Europe and the Asia-Pacific region, with few significant releases anticipated.

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