The week ahead: BP, RBS, Lloyds, Tullow
24th April 2015 16:47
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Monday 27 April
Trading statements
Centrica, Lifeline Scientific, Dillistone Group, C4x Discovery Holdings, Lok'n Store Group, Polyus Gold International.
AGM/EGM
Globaltrans Investment, Good Energy Group, Minoan Group, Symphony International Holdings, Frutarom Industries.
Tuesday 28 April
Wealth management firm will report first-quarter sales and assets under management (AUM) on Tuesday.
JP Morgan Cazenove's focus will be on net inflows and new business sales - two drivers showcasing growth at the company.
"We forecast 13% year-on-year growth in 1Q15e new business sales (manufactured business) due to continuing strong investment sales and unit trust sales forecast and we estimate the AUM to increase by 6.3% quarter-on-quarter in 1Q15e," says the broker.
Growth momentum should continue as a result of strong equity markets.
JPM reiterates its 'overweight' recommendation on the stock and raises its target price to 1,022p from 924p.
kicks off a very difficult first-quarter earnings season for the oil and gas sector, says Iain Armstrong at Brewin Dolphin.
"We think that earnings in Q1 will be about the level of the same period last year, which is more or less in line with the fall in the Brent oil price."
Upstream earnings will be most affected, according to the analyst, although there could be the initial positive impact of the planned cuts in capital expenditure and the on-going lay-off programme.
releases its full-year results on Tuesday.
The communication services firm, included in Interactive Investor's "Great British Business" initiative, published an upbeat pre-close statement in January and full-year results were expected to "exceed the top end of market expectation".
Westhouse Securities' Roddy Davidson's current full year revenue, adjusted PBT, adjusted EPS and DPS expectations are £108.2 million, £11.9 million, 11.0p and 3.3p respectively. He forecasts full-year net debt of £9.1 million.
With "attractive growth" on the cards, Davidson has an 'add' recommendation and 188p target price.
Economic news
On the economic front, preliminary first-quarter GDP is due on Tuesday.
Investec believe a relatively poor start to the year for the main sectors suggests that growth overall slowed to +0.4% over the quarter from +0.6% in the fourth quarter.
Howerver, they note that business surveys remain upbeat and therefore consider that it would be incorrect to extrapolate a slowdown in the first quarter through the remainder of the year.
The broker's full-year GDP forecast for 2015 is 2.5% (from 2.9%).
Trading statements
AB Dynamics, Xeros Technology Group, Infrastrata, BP, Avacta Group, Next Fifteen Communications Group, Whitbread, Centralnic Group, Eu Supply, Aseana Properties, Allied Mind, Avocet Mining, Carpetright, Standard Chartered, Segro, Henderson Group, St James's Place, Rexam.
AGM/EGM
Greencoat UK Wind, Romgaz, Dalata Hotel Group.
Wednesday 29 April
Engineer , retailer and tobacco group will all publish first-quarter trading updates half-way through the week.
Nicla Di Palma at Brewin Dolphin hopes to hear more positive news at Weir due to the modest recovery in the oil price.
At Next, Di Palma expects modest growth in this first quarter, taking into account the very strong performance posted in the first quarter of last year (sales up 10.8%).
"This would be in line with management guidance. It will be interesting to hear more about those collections that underperformed in the fourth quarter of last year and whether Next has managed to turn performance around."
Brewin Dolphin does not expect any news on the Reynolds/Lorillard tie up in the US when British American Tobacco updates investors.
There may be some news on the planned full consolidation of the Souza Cruz business in Brazil, of which BAT already owns three quarters, according to Brewin's Rob Scott Moncrieff.
"As usual we will look at general volume trends and pricing. The US tobacco firms reported strong updates last week, which may provide some positive read across."
UBS anticipates first-quarter organic sales growth of 4.5% at constant currencies, on the back of a 1.5% (total tobacco) volume decline.
"A resilient top-line and 4% yield (in the current low interest rate environment) means BAT remains one of our preferred names in the consumer staples sector," says UBS's Alan Erskine.
Erskine has a 3,750p target price and 'buy' rating on the stock, which Neil Woodford has a large holding of in his income-orientated .
Trading statements
Spirit Pub, Redefine International, Samsung Electronics Co, Megafon, Mi-Pay Group, Petropavlovsk , MHP S.A GDR, Home Retail Group, Development Securities, Vimetco Nv, Aquatic Foods Group, Summit Germany Limited, Brown (N) Group, London Stock Exchange Group, Next, Standard Life, Petropavlovsk, Aer Lingus Group, HellermannTyton Group, British American Tobacco, Barclays, Antofagasta, Alent, Weir Group, TSB Banking Group, Greggs, Stagecoach Group, Thorntons.
AGM/EGM
Global Ports Investments, Bank of Ireland, Lancashire Holdings, Aviva, Admiral Group, Manchester Building Society, Countrywide.
Thursday 30 April
reveals first-quarter results on Thursday, broker Jefferies says the bank is "back on the radar screens of the unloved".
"We regard reward/risk in RBS as asymmetric. We value the name at 510p using a core multiple of 1.9x tbv and applying 1x to an estimated £18 billion of 2017 excess capital. Risks are around operational execution, political interference, litigation and regulatory costs," Jefferies says, with a 'buy' rating on the stock.
Read our latest analysis to find out the best and worst UK bank shares.
looks set to report first-quarter numbers on Thursday.
Armstrong says most interest will be on the progress at solving the gas export problem at Jubilee, the update on the efficiency programme and the planned cuts in capex.
"The reduction in personnel in the Dublin office is expected to save nearly $200 million on an annualised basis and there should be further savings from a reduction in the number of sub-contractors".
Find out why analysts at Citi think Tullow is worth a look by reading: Buy Tullow Oil after upgrade.
Price comparison website will publish an interim management statement, with Westhouse's Davidson bullish on the firm's long-term fundamentals.
"We regard its market leadership, exposure to growth in switching activity, proven ability to deliver significant savings across a range of categories, proactive investment for growth and cash generation as key attractions."
Westhouse will use this update as an opportunity to review its 'neutral' stance.
Economic news
April's GfK consumer confidence index will be updated on Thursday. The index rose by 3 points last month to +4 - its highest level since June 2002.
"One of the factors behind increasing confidence is undoubtedly the continued decline in petrol costs over the winter," says Investec's Philip Shaw.
However, due to the modest rebound in pump prices recently he suspects that the upward march of the GfK index will lose its momentum and pencils in an unchanged outturn of +4.
Trading statements
Lancashire Holdings, Shire, Royal Dutch Shell, First Quantum Minerals, Access Intelligence, Saga, Smith & Nephew, Tullow Oil, Synthomer, Moneysupermarket.com Group, Howden Joinery, Go-Ahead Group, Fisher (James) & Sons, Berendsen, Schroders, International Personal Finance, Kaz Minerals, Royal Bank of Scotland Group.
AGM/EGM
Bank Pekao Sa, Resource Holding Management, Great Western Mining Corporation, COLT Telecom Group SA, LSL Property Services, Anglo Pacific Group, Bilfinger Berger Global Infrastructure.
Friday 1 May
will end the week with the release of its first-quarter trading figures.
The Conservatives recently confirmed plans to offer UK retail investors up to £4 billion in Lloyds' shares in the year post election if the party win the general election on 7 May.
Deutsche Bank sees this as a healthy development, but suggests that earmarking a proportion of an intended sell-down for a retail offering will "not change the end game or the value of the bank."
Despite the bank's significant business progress and an equity bull market the shares have traded sideways, says Deutsche.
However, Lloyd's offers "significant value at 9.7x 2016 adjusted EPS and with a 4% current year dividend yield."
'Buy' says the broker, with a 94p target price.
Economic news
Manufacturing PMI data for April and last month's household lending figures will be disclosed on Friday.
Investec's expectation is that the an "improving Euro area economy will lift new export orders over the months ahead and provide a foot up to externally focused UK manufacturers."
It looks for another tick-up in the index and pencils in 54.6.
"The March RICS housing market survey showed a step back in the slight pick-up in housing market activity metrics evident in the prior month’s survey," according to Investec's Victoria Clarke.
"We continue to judge that a firmer recovery in activity metrics will emerge more clearly over the months ahead and drive stronger increases in mortgage approvals, but recent RICS reports suggest we will not see this quite yet. Hence we are looking for a relatively moderate increase in March’s mortgage approval numbers, to 62,500 from 61,800 in February.
"With mortgage approvals having been on a slow, rising track over recent months our expectation is that net mortgage lending numbers next week will land in similar territory; we look for a an increase of £1.6 billion."
Trading statements
COLT Telecom Group SA, Rentokil Initial, Capital & Counties Properties, Lloyds Banking Group.
AGM/EGM
Virgin Money Holdings, Jardine Lloyd Thompson Group, Fairpoint Group, Aer Lingus Group.