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Here’s our regular look at the FTSE 350 & other companies reporting from 18 to 22 October

  • Netflix subscriber growth and gaming comments will be in focus
  • Tesla revved up deliveries in the third quarter, but semi-conductor shortages will be under the spotlight
  • We’d like to know if Barclays’ Net Interest Margin target is intact
  • Sales momentum in the face of easing global GDP forecasts will the question to address for Unilever
  • InterContinental Hotels looks to build on good progress and high expectations from the first half

Netflix, Q3 Results, Tuesday 19 October

Sophie Lund-Yates, Equity Analyst

“As always, the key number we’ll be watching out is for subscriber growth. This is what really matters in Netflix’s [NASDAQ:NFLX] results, and is the one most likely to move the share price on the day. Last quarter the group beat forecasts by adding 1.5m new subscriptions, but due to last year’s pandemic deluge, this was much slower than the same time in 2020.The group’s ability to pump out big hitting content like Squid Game may well be moving the dial on this front, but we do wonder what the reopening of the world will have meant for growth. Just as important as tempting new subscribers, is Netflix’s ability to keep hold of existing customers. Building scale and increasing prices being core pillars of the long-term strategy. That makes churn levels important to watch, as well as the scale of any price increases. The group also recently announced its interest in gaming, which aims to help with keeping customers sticking around. Commentary on how these ventures are going will be read with interest.”

Tesla, Q3 Results, Wednesday 20 October

Susannah Streeter, Senior Investment and Markets Analyst

Tesla [NASDAQ:TSLA] revved up deliveries in the third quarter, shipping just over 241 thousand electric vehicles to customers. The delivery update which beat expectations, should bode well for its third quarter results, with Elon Musk continuing to come up with the goods despite tough competition and supply chain headwinds. The demand for EVs shows signs of accelerating in key markets, however stumbling blocks could still be hit, if charging infrastructure development in countries does not keep up with sales expectations going forward. Any further indicators that Tesla is coping well despite the semi-conductor chip shortage, which has knocked other tech companies off course will be keenly watched. Tesla is keeping in the fast lane in terms of market share, particularly in the competitive Chinese market. But as concerns mount that growth in China is slipping, a knock in consumer confidence could push more prospective buyers into purchasing cheaper models than Tesla’s premium model S and Model X cars. Tesla has announced it’s moving its HQ to Austin Texas, due to Californian house prices becoming unaffordable, but investors will be more interested in when cars will start rolling out of its new factory there, and in the new plant in Berlin than where the administrative seat is. It also needs to ramp up production to compete with the might of rivals like Volkswagen, given the EV trajectory Volkswagen is aiming for, so an update on capacity increases will be welcome.”

Barclays, Q3 Results, Thursday 21 October

Sophie Lund-Yates, Equity Analyst

“Last we heard, Barclays [LON:BARC] had increased its net interest margin (the difference between what the bank charges borrowers and pays for funding) guidance for the full year. That’s an important milestone and reflected an increase in credit card balances. These had previously suffered, because customers paid off their credit cards faster during the worst of the pandemic. Next week we’ll find out if this trend has continued, and if that upgraded target is still intact. We also wonder how pre-tax profit will be affected by the changing bad-debt provisions. Last year, the group put aside swathes of money in case customers defaulted on payments, but these provisions are being unwound – which helped profits substantially in the first half. It’s a short-term tailwind, but one which we think will have continued into this quarter. We don’t expect the adverse effect of low interest rates on the profitability of Barclay’s loans to have disappeared. For now, interest rates are still stubbornly low, which means we don’t expect a total reversal of fortunes there. The important thing to note instead will be to what extent Barclay’s more diverse business model – read: its investment bank – has provided a bit of a backstop over recent months.”

Unilever, Q3 Trading Update, Thursday 21 October

Steve Clayton, Manager of the HL Select funds

“When the Anglo-Dutch consumer products giant reports on Q3 trading there will be no shortage of moving parts.

How well sales momentum has stood up in the face of easing global GDP forecasts will be closely examined. But most of all, it is the outlook for margins that is most likely to drive the stock on the day. Unilever [LON:ULVR] and its rivals face higher input costs with food, energy and packaging costs all rising sharply.

Brand strength will determine how well these costs can be passed through to consumers, protecting profits. Unilever needs to prove its portfolio has that strength.”

InterContinental Hotels, Q3 Trading Update, Friday 22 October

Nicholas Hyett, Equity Analyst

Intercontinental Hotels [LON:IHG] reported a steady recovery in US and Chinese domestic travel in the first half of 2021. With airlines reporting improving European travel trends over the summer there are reasons to think the green shoots of recovery have spread further in the third quarter. While it will take time for travel to return to “business as usual”, IHG believes it will emerge from the pandemic stronger than it went in. Smaller hotel chains are likely to have suffered through lockdowns, potentially reducing supply, while cost savings and efficiencies mean future revenues have the potential to be higher margin. Recovery in demand, new hotel openings and improved margins mean these have the potential to be blockbuster results. However, market expectations are correspondingly high, with second half revenues expected to rise by 73.2% year-on-year to £873m. Analysts expect operating profits to more than double.  Such high expectations can lead to painful disappointments.”

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

18-Oct
SchrodersQ3 Trading Update
19-Oct
888 HoldingsQ3 Trading Update
BellwayFull Year Results
BHP GroupQ3 Production Report
CentaminQ3 Production Report
NetflixQ3 Results
RHI Magnesita NVQ3 Trading Update
20-Oct
AntofagastaQ3 Production Report
AvastQ3 Trading Update
NestleQ3 Trading Update
SEGROQ3 Trading Update
Tesla*Q3 Results
VerizonQ3 Results
21-Oct
AJ BellFull Year Trading Update
Anglo AmericanQ3 Production Report
BarclaysQ3 Results
Dechra PharmaceuticalsQ3 Trading Update
RelxQ3 Trading Update
RenishawFull Year Results
Rentokil InitialQ3 Trading Update
SpectrisQ3 Trading Update
St. James’s PlaceQ3 Trading Update
Unilever*Q3 Trading Update
Vivo EnergyQ3 Trading Update
VolutionFull Year Results
22-Oct
InterContinental Hotels Group*Q3 Trading Update
London Stock Exchange GroupQ3 Trading Statement

This article is 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.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Michael Morton

Michael Morton

Michael has worked within the Financial Industry for more than 20 years. Starting out as a financial analyst, he has extensive experience working with fund management groups and brokerages.

With an interest in Stocks and Shares, Funds, ETFs and Commodities, his investment focus is medium to long term gains, with the objective of financial security on retirement, and building wealth for his young children for their adult life. His broker of choice is Hargreaves Lansdown.

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