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Companies Reporting: Barratt Developments, Unilever, Disney

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Our regular look at the FTSE 350 and a selection of other companies reporting from 5 – 9 February

  • Barratt Developments hoping for a brighter second-half outlook
  • Disney’s streaming subscribers will be in the spotlight
  • Unilever hopes to prove price hikes are still working
  • Will Compass deliver enough on the day to match or beat expectations?

Barratt Developments – Half Year Results, Wednesday 7 February

Aarin Chiekrie, equity analyst, Hargreaves Lansdown “Like all housebuilders, Barratt Developments [LON:BDEV] has had to wrestle against some tough conditions in recent times. In a first-quarter update, investors heard that reservations had taken a hit as buyers struggled with mortgage affordability, and the scrapping of the Help to Buy scheme hasn’t helped the sector either.

In next week’s half-year results, investors will be hoping to hear a slightly more upbeat tune from Barratt, as the outlook for the sector is showing some early signs of improvement. Lenders are becoming more competitive, which should stimulate buyer demand and help prop up the group’s order book. And build cost inflation is easing, which should provide some welcome relief to the group’s margins. This should keep Barratt’s full-year guidance of 13,250-14,250 new homes well within reach. But it will take time for all of these tailwinds to feed through to the income statement, so markets still expect half-year revenue to be down by around a third at £1.8bn.”

Walt Disney Co – Q1 Results, Wednesday 7 February

Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown “The market expects revenue to have nudged up around 0.8% in next week’s results, while operating profit’s anticipated to show close to 28% growth. Given the group’s valuation has seen a roughly 7.5% uplift since the start of the year, there’s clearly growing optimism that Disney [NYSE:DIS] can deliver.

The focus will be on streaming subscriber growth over at Disney+. Competition remains fierce, and the group’s other big brands like ESPN+ and Hulu are also up against stiff competition. It’s upset on this front that’s likely to move the dial.

Finally, it’s cost savings that investors will be watching. Disney expects to reduce costs by a further $2bn, but this won’t be coming from further widespread job cuts. Stemming losses in streaming is the right play to make, but it’s a difficult balance to get right when competitors are snapping at your heels.”

Unilever – Full Year Results, Thursday 8 February

Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown “All eyes are on price hikes at brand powerhouse Unilever [LON:ULVR]. Last quarter, Unilever reported third-quarter sales of €15.2bn, reflecting underlying sales growth of 5.2% – in line with expectations. Price hikes of 5.8% more than offset a 0.6% drop in volumes.

With inflation easing, just how pronounced price increases are nowadays will be a key metric to watch. Investors will also be hoping to see volumes picking up some more slack.

New CEO Hein Schumacher has announced a renewed focus on gross margin improvement, and markets will be expecting more information on how this is going. A focus on the group’s 30 biggest brands is on the cards, and investors should get some details on further plans to streamline the portfolio.”

Compass Group – Q1 Trading Statement, Thursday 8 February

Steve Clayton, head of equity funds, Hargreaves Lansdown “Recent statements from the group have been buoyant, with strong organic growth and good control of margin pressures. The outlook for Compass [LON:CPC] seems positive; the US is their key market, and both employment and leisure spending are holding up well. That bodes well for their business and commercial sectors along with their events business which provides catering in sports and events venues.

Food price inflation has fallen sharply in recent months, suggesting that input pressures ought to be easing. Investors will be keen to hear Compass’s views on the margin outlook. The question will be whether Compass can deliver enough on the day to match or beat expectations, given the shares are already close to their all-time highs.”

This article has been brought to you in association with Hargreaves Lansdown. All opinions expressed in this article are from the analysts and do not necessarily represent the opinions of The Armchair Trader.

FTSE 100, FTSE 250 and selected other companies scheduled to report

05-Feb
Caterpillar Q4 Results
McDonald’s Q4 Results
Vodafone Q3 Trading update
06-Feb
BP Q4 Results
discoverIE Group Q3 Trading Statement
Renishaw Half Year Results
Virgin Money Q1 Trading Statement
07-Feb
Alibaba Q3 Results
Ashmore Half Year Results
Barratt Developments Half Year Results
DCC Interim Management Statement
PZ Cussons Half Year Results
Smurfit Kappa Full Year Results
UK Commercial Property REIT Q4 Net Asset Value Statement
Walt Disney Co Q1 Results
08-Feb
Anglo American Q4 Production Report
AstraZeneca Q4 Results
British American Tobacco Full Year Results
Compass Group Q1 Trading Statement
PayPal Q4 Results
SSE Q3 Trading Statement
Syncona Q3 Results
Unilever Full Year Results
Watches of Switzerland Q3 Trading Statement
09-Feb
Bellway Trading Statement
Redrow Half Year Results
PepsiCo Q4 Results

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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