BP PLC (LON:BP.) is among only a few big oil firms positioned to expand in 2019 in what is seen as a more challenging environment.
Growth considerations will, therefore, potentially be a focal point - away from the usual financial bullet points - when the FTSE 100-listed firm updates the market with its full-year 2018 results on Tuesday.
In a recent sector note, Deutsche Bank analyst Lucas Herrmann said: “Sharp commodity declines combined with a challenging downstream means the strong earnings and cash momentum apparent for much of the past two years should end this quarter”.
However, he added, BP’s results should show “good year-on-year progress with headline cash flow strongly supported by the material release of working capital, helpful for balance sheets.”
The German bank believes that BP’s market valuation continues to “understate the visibility of its growth and balance in its portfolio”. Deutsche Bank retains a ‘buy’ rating on BP with a 590p price target.
Will Ocado confirm talks with M&S?
Elsewhere among the blue-chips, Ocado PLC’s (LON:OCDO) full year results are likely to be overshadowed by rumours of “secret talks” with Marks and Spencer PLC (LON:MKS) about a supply deal.
The online grocer is understood to be considering replacing Waitrose as its groceries supplier with M&S, according to a recent Mail on Sunday report.
In reaction to the news, shares in Ocado and M&S jumped last week, which suggests investors would be happy with such an arrangement.
The market has also speculated that M&S might buy Ocado’s entire grocery delivery operation, a move that would leave Ocado to focus on its technology business.
Ocado has been transitioning to an international technology firm by supplying its digital platform and warehouses to other supermarkets.
However, its own grocery delivery business is still going strong, given the competition the sector is facing.
In the fourth quarter, Ocado’s retail revenue rose 12% on the year to £390.7mln as average orders per week gained 13.1% to 320,000 after expanding capacity with new warehouses in Andover and Erith.
The FTSE 100-listed firm’s chief executive Tim Steiner said then: “Although in many respects 2018 has been a transformative year for Ocado, the story has only just begun.”
Room for disappointment from St Modwen
Away from the big caps, full-year numbers from real estate group St Modwen Properties PLC (LON:SMP) could disappoint analysts at Peel Hunt.
They are forecasting the FTSE 250-listed firm to deliver 5% growth in its 2018 net asset value (NAV), the majority of which would be delivered in the second half.
But, they said in a preview, given the macro environment and the continued shift in the company's strategy, this may prove too optimistic.
They added: “The majority of gains are likely to be generated from the company's own activity within house-building, planning uplifts and commercial developments but some of this may be offset by adverse moves within the investment portfolio.”
The analysts said are also looking for an update on the plans for St Modwen’s remaining retail/leisure portfolio and for more information on its development pipeline, which will become an increasing driver of growth going forward as the group’s strategy progresses.
Significant events expected on Tuesday February 5:
Finals: BP PLC (Q4) (LON:BP.), Ocado PLC (LON:OCDO), St Modwen Properties PLC (LON:SMP), RM Plc (LON:RM.). Amino Technologies PLC (LON:AMO)
Interims: Mattioli Woods plc (LON:MTW)
Economic data: UK services PMI; US ISM non-manufacturing; US services PMI; US balance of trade