Weekly outlook: Vodafone reports and US retail sales data

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10 November 2023

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Monday 13 November

First-half results from British Land
Trading statement from BAE Systems
Rightmove UK house price index
In Asia, quarterly results from Samsonite
In the US, quarterly results from Tyson Foods

Tuesday 14 November

First-half results from DCC, Land Securities, Babcock International, Oxford Instruments and CakeBox
Trading statements from ConvaTec, Informa, Hill & Smith, Grafton and Vesuvius
UK unemployment, wage growth and job vacancies
German ZEW economic sentiment survey
US NFIB smaller companies survey
US consumer price inflation figures
In Japan, quarterly results from Toshiba and Dentsu
In Asia, quarterly results from LG, Hon Hai Precision, Sea and Tencent
In Europe, quarterly results from SeaDrill, RWE and Siemens Energy
In the US, quarterly results from Home Depot, Nu and Tencent Music
Vodafone first-half results

Vodafone will produce its first-half results on Tuesday, following a period where shares have dropped a quarter in the past year.

In October 2022, share prices hit around 75p, a rate similar to 1997 before the technology and media boom. Russ Mould, investment director at AJ Bell, and Danni Hewson, head of financial analysis at AJ Bell, said end of year results in May also failed to provide stability.

“May’s full-year results did not help sentiment much, even though chief executive Margherita Della Valle launched her ‘Customers, Simplicity and Growth’ strategy, and that was because the boss cut profit and cash flow forecasts for the year to March 2024 and forecast yet another year of unchanged dividends,” Mould and Hewson said.

This fiscal year’s first quarter update in July also showed difficulty, with sales growth dropping 4.8%. Underlying service revenue, however, rose 3.7%. Analysts will look at figures including group-wide organic sales growth and regional trends as the half-year report is released.

“Vodafone is still finding the going tough in its four largest markets, with only the UK offering any real joy,” Mould and Hewson said.

Vodafone’s benchmarks, which were downgraded in May, will include its underlying earnings before interest, taxes, depreciation, amortisation, and lease expenses, which comes in lower than a year ago, at €13.3bn from €14.7bn. It will also have a lower adjusted free cash flow, which will come in at €3.3bn before spectrum costs to fiscal 2023’s €5.5bn.

“Back in May, Della Valle flagged Turkey, Portugal, Ireland, the Czech Republic, South Africa and Greece as areas that were doing well and the UK, Germany, Spain and Italy as ones that were not,” Mould and Hewson said.

“Unfortunately, that meant the smaller operations were doing better than the larger ones. Spain is now to be sold, for up to €5 billion in cash, to an AIM-quoted cash shell and rumours of a merger with Three in the UK refuse to go away, while activity in other markets is also possible.”

Wednesday 15 November

First-half results from SSE, Experian and Fuller, Smith & Turner
Trading statements from Tullow Oil
Analysts’ meeting at Diageo
UK inflation figures
Chinese retail sales, industrial production and tangible fixed asset investment growth
EU industrial production
US producer price (factory gate) inflation data
US oil inventories
In Europe, quarterly results from Alstom
In the US, quarterly results from Target, Cisco, Tower Semiconductor and Kulicke & Soffa
October US retail results

October US retail sales results will be made available on Wednesday. So far this year, the US economy has proved resilient amid fears of a recession.

“One of the biggest surprises of the year has been the strength of the American economy,” Mould and Hewson said.

“At this time last year, equity markets were fearing a recession, but such concerns have proven misplaced and one of the reasons is that US GDP growth was 4.9% on an annualised basis in the third quarter after inflation.”

The US has seen an uptick in personal consumption, corporate investment, and government spending, with only trade sitting in the negative with imports overtaking exports.

“In many ways, the consumer is key, because personal consumption represents about two-thirds of US GDP, and in the coming week all eyes will therefore be on the latest monthly US retail sales figures,” Mould and Hewson said.

Retail sales growth rose to 3.8% year on year in September, although some analysts will have their eyes on personal savings rates to determine if this growth is sustainable. As of September, personal savings rates hovered below 5%.

Thursday 16 November

First-half results from United Utilities, Burberry, Halma, QinetiQ, Premier Foods and Norcros
Trading statements from Aviva, Smiths Group, Spirax-Sarco Engineering, Melrose, Close Brothers, Keller, Crest Nicholson and Kier
US industrial production
US NAHB housebuilding industry survey
US weekly initial unemployment claims
In Asia, quarterly results from Lenovo
In Europe, quarterly results from Siemens, Aegon, Subsea7 and Vallourec
In the US, quarterly results from Wal-Mart, Warner Music, Applied Materials, Manchester United, Dolby Laboratories and Macy’s