Weekly outlook: Associated British Foods and AstraZeneca to report

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03 November 2023

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Monday 6 November

UK purchasing managers’ index (PMI) for the construction industry
EU purchasing managers’ index (PMI) for services industries
In Asia, monthly sales figures from silicon chip foundry UMC
In Europe, quarterly results from Ryanair and Kingspan
In the US, quarterly results from Berkshire Hathaway, NXP Semiconductor and BioNTech

Tuesday 7 November

First-half results from RS Group
Trading statements or quarterly results from Beazley, Persimmon, Direct Line, Watches of Switzerland and IWG
Halifax UK house price index
Monetary policy decision from the Reserve Bank of Australia
In Japan, quarterly results from NTT, Mazda Motor and Nintendo
In Asia, quarterly results from Singapore Airlines
In Saudi Arabia, quarterly results from Aramco
In Europe, quarterly results from UBS, ENEL, Amadeus, CapGemini, Daimler Truck and Leonardo
In the US, quarterly results from Gilead Sciences, Uber, Emerson Electric, Occidental Petroleum, KKR, eBay, Rivian Automotive, Nio, Coinbase, Robinhood Markets, Klaviyo and Krispy Kreme
Associated British Foods full-year results

Associated British Foods will release its results for the fiscal year that ended in September on Tuesday. Over the year, shares in AB Foods have risen around 40%.

The company results, which encompass brands including Primark, Twinings, British Sugar, Allinson’s, and Sunblest, will come off the back of a year which began with the contentious period of ‘Trussonomics’.

Russ Mould, investment director at AJ Bell and Danni Hewson, head of financial analysis at AJ Bell, said: “The low base of expectations helped but a lot of retail stocks have done well in 2023, spurred by a retreat in oil and gas prices (at least until recently), energy price subsidies, strong wage growth and low unemployment.”

AB Foods is also in the midst of a share buyback, with £442m of a £500m programme repurchased as of September. As figures are released, analysts will have their eyes on sales, estimated to rise 20% to hit £20bn, earnings per share, which should be near 138p, and the dividend per share, which should rise to 48p from 43.7p last year.

“Note that management may also unveil plans for an additional distribution of what it calls surplus cash – AB Foods did offer a special dividend of 13.8p a share in fiscal 2021, on top of regular dividends worth 26.7p a share,” the duo said.

Analysts could also use profit margins as a telling point, which are expected to widen for British Sugar and Primark.

“Watch out for an update on both the Primark store expansion plan and also on the Click and Collect trial that is now running at 57 stores in the UK and is being extended beyond kidswear to include womenswear,” Mould and Hewson added.

Wednesday 8 November

Full-year results from Smiths News
First-half results from Marks & Spencer
Trading statements or quarterly results from ITV, Hiscox, JD Wetherspoon and Secure Trust Bank
European retail sales
US oil inventories
In Japan, quarterly results from Softbank
In Europe, quarterly results from Airbus, Credit Agricole, Vestas Wind Systems, and Telefonica
In the US, quarterly results from Warner Bros. Discovery, Coty, Instacart, Coherent, AMC Entertainment and Beyond Meat

Thursday 9 November

Full-year results from WH Smith
First-half results from National Grid, 3i, B&M European Value Retail, Auto Trader, Wizz Air and Wincanton
Trading statements or quarterly results from Flutter Entertainment, Taylor Wimpey, Endeavour Mining, IMI, Lancashire, John Wood, Indivior and Domino’s Pizza
Chinese producer price (factory gate) inflation
US weekly initial unemployment claims
US mortgage delinquencies
In Japan, quarterly results from Sony, Nissan Motor, Rakuten and Nikon
In Asia, quarterly results from SMIC
In Europe, quarterly results from Siemens Healthineers, E.On, Commerzbank, ABN Amro, Bayer, Adidas, Pandora, Continental, ArcelorMittal, Pirelli and Coloplast
In the US, quarterly results from Walt Disney, TakeTwo Interactive, ActivisionBlizzard, Illumina, Lyft, Roblox, Ralph Lauren, MGM Resorts, Icahn Enterprises, Grab and Tapestry

AstraZeneca will release its third quarter results on Thursday, currently occupying the second-highest spot on the FTSE 100 by market cap.

The company lost its top spot for market capitalisation as oil prices solidified in the wake of conflict, putting Shell at the top of the list, and mixed results over two drug trials. While AstraZeneca’s Imfinzi Phase III performed well in June, testing for oncology treatment ”datopotamab deruxtecan’ in July did not meet expectations.

“AstraZeneca’s shares have more than trebled since Pascal Soriot became CEO in October 2012,” Mould and Hewson said.

“The stock trades on a much higher earnings multiple as a result, so good news from the pipeline is now required to meet and exceed expectations, especially in the area of oncology. As such, attention may focus as much on new drug development as the third-quarter results themselves, as the company focuses on its core areas of oncology, cardiovascular, renal and metabolism, respiratory and rare diseases.”

In the second quarter, AstraZeneca outperformed expectations despite a drop in sales around COVID-19 vaccines, with sales improving 6% year-on-year on a stated basis.

“AstraZeneca has developed a shareholder-pleasing knack of meeting and beating analysts’ forecasts and upgrades to expectations are one reason why the shares still trade close to their all-time highs,” Hewson and Mould said.

Oncology was the top growth area for the company, up 22% in the second quarter results thanks to treatments including Tagrisso, Imfinzi, Lynparza, and Calquence.

In July, Soriot released guidance for the the full-year 2023, which included increasing total revenue by a “low-to-mid single digit percentage”, a slight increase in core operating expenses with development work, and a rise in core earnings per share.