Companies Reporting: Diageo, Novo Nordisk, Shell

Our regular look at the FTSE 350 and a selection of other companies reporting from 29 January – 2 February

• Diageo will be hoping to avoid any more earnings disappointments.
• Novo Nordisk – will investments in production lift the lid on 2024 growth guidance?
• We’ll find out if fourth-quarter cash flows have clammed up for Shell.

Diageo – Half Year Results, Tuesday 30 January

Aarin Chiekrie, equity analyst, Hargreaves Lansdown “Back in November 2023, Diageo shocked markets by warning that this year’s revenue and profit would both be lower than expected. This came as performance in its Latin America and Caribbean region was materially weaker than anticipated, with first-half organic sales set to decline by more than 20%. Because of this, first-half operating profit looks set to fall around 4.3% to £3.6bn when the group reports next week.

In the group’s other major regions, momentum is expected to remain positive, with sales rising across the board. The Guinness brewer has a strong portfolio of brands under its belt, which should help it to return to 5-7% organic sales growth over the medium term. Investors will be keeping a close eye on the demand picture, with any further weakness likely to bring this guidance into question.”

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Novo Nordisk – Full Year Results, Wednesday 31 January

Derren Nathan, head of equity research, Hargreaves Lansdown “Novo Nordisk’s growth of late has been propelled by sales of its GLP-1 medicines in diabetes, with even stronger momentum in obesity care. Investors look forward to full year numbers next week, where the latest guidance suggests an increase of 32-38% for sales and 40-46% for operating profit.

The forthcoming results provide an opportunity for Novo to set initial guidance for 2024. Investors hope to hear how investments in manufacturing are relieving production bottlenecks. Some analysts will also be looking out for an update on the regulatory pathway for a once weekly insulin injection for diabetics, IcoSema, which has recently seen positive clinical trials data.”

Shell – Full Year Results, Thursday 1 February

Derren Nathan, head of equity research, Hargreaves Lansdown “Investors are not expecting to see a dip in oil & gas production in Shell’s fourth quarter numbers next week. However, lower refinery utilisation and weaker commodities prices have the potential to dent cash flows.

Volatile pricing is part and parcel of being an energy company. However, an increased commitment to shareholder distributions and significant investment plans in both traditional and renewable energy means that there’s growing competition for funds. Meanwhile, there’s been mounting pressure for Shell to double down on its renewable commitments. So, investors will be keeping a close eye on Shell’s plans to allocate its cash in 2024.”

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