In the coming week, which will be foreshortened in the UK by the Easter Monday bank holiday, there will be more big-company action in the US as earnings season kicks in with giants including Netflix and Tesla, while in London miners will be prominent.
Tuesday will see Netflix Inc (NASDAQ:NFLX) take the Wall Street stage as the first tech FAANG company to update the market with its first-quarter results.
In its last update, the film and TV streaming site forecasted subscriber growth numbers to slow down, adding only 2.5mln new customers, down from 4mln a year before, and so it is crucial Netflix hits this target.
Share price tanked in its last update in the middle of January, losing 22% to US$397.20.
Failing to hit the lower target would be a real blow for the company and likely send the share price plummeting further, although analyst Sophie Lund-Yates at Hargreaves Lansdown said she believed the “only thing that will really move the dial is any talk of margins.”
Competition in the sector is fierce, with large spending on content to be expected if it wishes to stay on top.
However, Lund-Yates adds that big content bill is fine, as long as “margin expectations of 19%-20% remain intact.”
Elsewhere, the AGM season is also underway, with Anglo American PLC (LSE:AAL)'s shareholder meeting seeing chief executive Mark Cutifani wave goodbye at after eight years at the helm of the mining giant.
He’s leaving on a high with the miner recently posting underlying profits of US$80bn, cashflow of US$40bn and a special dividend to boot.
Investors too will be happy enough with the doubling of the share price since he took over in 2013.
Duncan Wanblad is Cutifani’s successor, and he should have plenty of firepower to keep things moving forward according to Goldman Sachs (NYSE:GS), which recently heralded the dawn of a new “multi-year unprecedented bull cycle in metals.
Anglo also reports first-quarter production on Thursday this week.
WEDNESDAY
Elon Musk might’ve worn out all of the headlines by the time that Tesla Inc (NASDAQ:TSLA) reports its first quarter results on Wednesday.
The rocketman launched a hostile takeover move for Twitter with an offer reportedly pitched at US$43.4bn, after taking 9.1% stake in the social media company and declining a seat on the board.
If successful, the bid would add the world’s busiest social media platform to the portfolio of “world’s wealthiest man” adding to Tesla (the world’s leading electric and self-driving vehicle company), SpaceX (the world’s most advanced private rocket and space travel company), the Boring Company (which drills massive tunnels under some of the world’s biggest cities).
Tesla shareholders and Musk fan-persons will of course want to see car and production stats, financial metrics and latest guidance – they may also want to know what commitment Musk retains for his car maker, not least given that the divestment of Tesla shares are at least partly responsible for Musk’s stake building in Twitter.
For the first quarter earnings are expected to come in at US$2.27 a share, down from the US$2.54 in the fourth quarter of 2021.
Deliveries for the first quarter of this year have been announced as over 310k, another record, though below expectations due to supply chain disruptions.
On the plus side the new plants in Germany and Texas have opened, which should help boost Tesla’s production levels.
Mining giants Rio Tinto PLC (LSE:RIO) and Antofagasta PLC (LSE:ANTO) both report first quarter production on Wednesday (with Anglo American a day later).
The Chilean colossus endured a wobble recently over the local political situation but is now back within touching distance of its five-year high.
Copper prices have been edging towards new peaks due to the situation in Ukraine and battery metal demand.
In January, Antofagasta forecast production of 660-690,000 tonnes in 2022 at a net cash cost of $1.55/lb. The spot price currently is US$4.73/ lb, underscoring why the shares have recovered recently.
Both ANTO and RIO should be beneficiaries of the current bull cycle in metals cited by Goldman Sachs earlier in the month.
The investment bank heralded the dawn of a new supercycle for miners based on underinvestment in the past, the need for battery metals and geopolitical instability.
“Our optimism also extends beyond 1Q earnings,” Goldman analysts said, highlighting “a multi-year unprecedented bull cycle in metals underway, with most metals in short supply”.
Bunzl PLC (LSE:BNZL), which describes itself as a value-added distributor, will likely be banging on about the resilience of its business model in its first-quarter trading update on Wednesday.
At the end of last year, it said it saw enduring uncertainties relating to the extent of inflation and the effect of new Covid-19 variants, and the continued normalisation of group operating margins in 2022 to more historical levels.
German bank Berenberg recently downgraded the stock to ‘hold’ despite lifting its target price to 2,950p from 2,750p, saying the group has benefited from “inflationary tailwinds” but suggested the organic growth outlook is “muted”.
THURSDAY
Several brokers had expected an update from THG PLC (LSE:THG), aka the Hut Group, in the past week but it never arrived.
Full-year results are now expected on Thursday 21 April, the company later announced.
Management will be keen to repair its reputation after getting on the wrong side of the City, which has grown impatient for the online retail platform to unlock the supposed power of its technology.
The beleaguered group recently appointed ex-ITV head Charles Allen as its new chairman and has generally made a raft of other improvements to the group’s corporate governance structures over the last year in an attempt to placate investors.
Allen’s task is to develop the management team and refine the group’s strategy but it is probably too soon to expect any big announcement on strategy.
Meggitt PLC (LSE:MGGT) last year was in the news as the defence contractor received a £6.3bn bid from US peer Parker Hannifin.
As Meggitt makes parts for civilian and military aircraft, including the US F-35 fighter jet, the US company’s move has raised questions as to foreign involvement in UK companies involved connected to UK national security.
“The deal appears to be currently being held up by conversations with the UK government over assurances on keeping jobs in the UK,” said Michael Hewson at CMC Markets.
“Historically these types of pledges have proved to be largely worthless and while Meggitt shareholders may be in favour of the deal, there is also a chance it might get blocked by the Competition and Markets Authority (CMA), after the deal was referred by the business secretary in October last year.”
As for the financials, Meggitt’s latest results showed a swing to pre-tax profits of £31.3mln in 2021 from losses of £334mln in 2020, even though revenues fell.
FRIDAY
On Friday the Office for National Statistics (ONS) publishes retail sales for March, which are expected to see a sharp contraction in growth, while consumer confidence data will also be important, given the grim readings on inflation recently.
After January’s retail sales rose 1.9% this was reversed in February as retail sales slipped back by -0.3%.
Also in the UK, consumer confidence by GfK is scheduled to be released on Friday, though March was before higher energy, council tax and broadband bills kicked in.
“Even so, the study may well still see the impact of rising fuel and food prices, as inflation continues to gallop away,” said analysts at AJ Bell.
They added: “Inflation is taking its toll because price rises are outstripping wage growth. That, in turn, is already hitting consumer confidence.”
The result from the GfK survey has plunged from -7 last July, as the country emerged from lockdowns, to -31 in February, the lowest reading since November 2020.
On top of inflation, there may also be issues with the rising number of COVID cases and the Russian invasion of Ukraine.
Monday 18 April 2022
UK bank holiday.
Tuesday 19 April 2022
Finals: JTC PLC (LSE:JTC)
Trading announcements: Integrafin Holdings PLC, Kainos (LSE:KNOS) Group PLC
AGMs: Anglo American PLC, Blue Star Capital PLC (AIM:BLU), GreenRoc Mining PLC (AIM:GROC), Herald Investment Trust (LSE:HRI) PLC
Economic Data: Building Permits (US), Housing Starts (US)
Wednesday 20 April 2022
Finals: Oxford Biomedica PLC, Wood Group (John) PLC
Interims: Carrs Group PLC, Centamin PLC (LSE:CEY, TSX:CEE, OTC:CELTF)
Trading announcements: Antofagasta PLC, Bunzl PLC, Petra Diamonds PLC, Rio Tinto PLC
AGMs: Biome Technologies PLC (AIM:BIOM), Bunzl PLC, Hunting PLC (LSE:HTG), Sthree PLC, Synetics PLC
Economic Data: MBA Mortgage Applications (US), Existing Home Sales (US), Crude Oil Inventories (US)
Thursday 21 April 2022
Finals: Bonhill Group PLC (LSE:BONH), Churchill China (AIM:CHH) PLC, LBG Media Ltd, Safestyle UK PLC (AIM:SFE), Serica Energy Plc (AIM:SQZ)
Trading announcements: AJ Bell PLC (LSE:AJB), BHP Group Ltd, DP Poland PLC (AIM:DPP), Meggit PLC, PensionBee Group PLC (LSE:PBEE), RELX PLC (LSE:REL), Rentokil Initial PLC (LSE:RTO), Segro PLC
AGMs: Alliance Trust PLC (LSE:ATST), Ibstock PLC (LSE:IBST), Journeo PLC (AIM:JNEO), RELX PLC, Senior PLC (LSE:SNR), STV Group Plc (LSE:STVG)
Economic Data: Continuing Claims (US), Initial Jobless Claims (US), Philadelphia Fed Index (US)
Friday 22 April 2022
Finals: Zinc Media (AIM:ZIN) Group PLC
Trading announcements: Record PLC (LSE:REC)
AGMs: Bellevue Healthcare Trust PLC, Faron Pharmaceuticals Oy (AIM:FARN, OTC:FPHAF), Murray International Trust plc (LSE:MYI)
Economic Data: GFK Consumer Confidence (UK), Retail Sales (UK)