The week ahead: BT, Next, Morrisons

Monday 7 May

May Bank Holiday – Market closed

Tuesday 8 May

Trading Statements

Magnitogorsk Iron Steel Works, Cambria Automobiles, Verona Pharma, IDE Group, Faron Pharmaceuticals, William Hill

AGM/EGM

Miton Group, Maintel, EKF Diagnostics, React Group, Totally, William Hill, ValiRx, Diploma, John Laing Group, CPP Group, Costain Group

Wednesday 9 May

Trading Statements

TUI, Imperial Brands, Compass, Provident Financial, Vertu Motors, Glenveagh Properties, Deltex Medical, One Savings Bank, Greggs, G4S

AGM/EGM

Igas Energy, Jupiter US Smaller Companies, Patagonia Gold, Ebiquity, TomCo Energy, IFG Group, Dunedin Enterprise Investment Trust, Capital & Regional, Grafton Group, Greggs, Virgin Money Holdings UK

Thursday 10 May

As is typical, it’s Thursday which steals the show given a handful of big-hitters unveiling numbers, plus the Bank of England announcing its decision on interest rates at midday.

Not long ago, the hot money was on a rate hike in May, but it’s highly unlikely the Monetary Policy Committee will increase borrowing costs following poor GDP data and falling inflation.

Like the rest of the market, BT (BT.A) had a great April in terms of share price performance, but they’re down over 6% in the first few days of May ahead of these fourth quarter results.

It’s not a new issue for BT, but investors remain fearful of a massive increase in capital expenditure on the fibre network with no incremental return. It’s been a “major overhang”, but broker UBS believes that we will soon get greater clarity on the issue, and that BT will be allowed to make a return on its investment.

“Overall, we see BT as too cheap on an 8.6% calendarised [equity free cash flow] for 2018E (post pension) and a 6.3% dividend yield,” writes UBS analyst Polo Tang who backs the shares up to 310p, a 32% premium to the current price.

Source: interactive investor            Past performance is not a guide to future performance

After a terrible 2016, Next (NXT)’s share price has made progress. It’s well below the £80 high in 2015, true, but we’ve had fewer scares, and analysts think they could go higher still.

Andrew Hughes at UBS keeps his estimates for these first-quarter results unchanged, arguing that the corresponding period in 2017 was poor, so presents a weak comparison, but snow may have affected the numbers.

Look for 3% growth in Brand sales, retail like-for-like sales down 7.5% and Directory up 15%.

“This should be a respectable start to the year, albeit comps do get tougher as the year progresses,” says Hughes. “Our profit before tax estimate of £715 million is slightly higher than Next’s central guidance.”

As if all this wasn’t enough, supermarket Morrisons (MRW) puts its first-quarter results in the shop window. Just a week after Sainsbury’s announced its tie-up with Asda, speculation is that Amazon (AMZN), which already has a relationship with Morrisons, could snap up the grocer with change found down the back of its sofa!

Morrisons shares have risen from 200p to 240p inside a month, but it will need some stunning numbers – unlikely – if they’re to do much more unless a predator shows its hand.

Trading statements

Arrow Global, BT, On The Beach Group, Telecom Egypt, RSA Insurance, Superdry, Vesuvius, TP Icap, ITV, Barratt Developments, Coca-Cola HBC, Derwent London, Next, Morrison Supermarkets (MRW)

AGM/EGM

Triple Point Social Housing Reit, Condor Gold, SIG, Tyman,The Renewables Infrastructure, Melrose, Gresham Technologies, X5 Retail Group, Aviva, Direct Line Insurance, Onesavings Bank, ConvaTec Group, Michelmersh Brick

Friday 11 May

Trading statements

BBA Aviation

AGM/EGM

John Wood Group, RSA Insurance

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation, and is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company’s or index name highlighted in the article.

Source.