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The FTSE 350 next week - Lloyds, AstraZeneca and WPP

The FTSE 350 next week - Lloyds, AstraZeneca and WPP

20 April 2017

No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

Theresa May’s decision to call a snap election in the Summer has grabbed the headlines this week, but for the City writers at least, next week promises to be busier still. With a raft of the FTSE’s biggest companies reporting, including 4 of the 5 FTSE 100 banks, we take a look ahead as:

  • Lloyds Banking Group investors keep a keen eye out for signs of bad loans rising. However, even if they are on the up it’s likely to remain business as usual for now, despite the possible implication of tougher times ahead for the wider UK economy.
  • AstraZeneca continues to require patience from its investors as the pipeline develops
  • WPP looks to calm investor nerves after a weaker than expected start to the year at full year results last month.

FTSE 350 stocks reporting next week

Anglo American Q1 Production Report
Petra Diamonds Q3 Trading Update
Amec Foster Wheeler Full Year Results
BHP Billiton Q3 Operational Review
Circassia Pharmaceuticals Full Year Results
Elementis Trading Update
Nostrum Oil & Gas Q1 Operational Update
St James's Place Q1 New Business Announcement
Whitbread* Full Year Results
Antofagasta Q1 Production Report
CRH Trading Statement
Croda Q1 Trading Update
Fresnillo Q1 Production Report
GKN* Q1 Trading Statement
GlaxoSmithKline* Q1 Earnings Results
Hochschild Mining Q1 Production Report
Jupiter Fund Management Q1 Trading Update
London Stock Exchange Q1 Interim Management Statement
Metrobank Q1 Results Announcement
Redefine International Half Year Earnings Results
Standard Chartered* Q1 Interim Management Statement
Tullow* AGM Trading Update
Aggreko Q1 Trading Statement
Allied Minds Full Year Results
AstraZeneca* Q1 Earnings Release
Berendsen Q1 Trading Statement
Cobham Interim Management Statement
Howden Joinery Q1 Trading Statement
Jardine Lloyd Thompson Q1 Interim Management Statement
KAZ Minerals Q1 Interim Management Statement
Lloyds Banking Group* Q1 Interim Management Statement
Meggitt Trading Statement
Persimmon* Trading Statement
Schroders Q1 Interim Management Statement
Taylor Wimpey* Trading Statement
Travis Perkins Q1 Trading Statement
Weir Group Q1 Interim Management Statement
WPP* Q1 Trading Statement
Barclays* Q1 Interim Management Statement
Computacentre Q1 Trading Update
Hastings Q1 Trading update
Rotork Trading Statement
Royal Bank of Scotland* Q1 Interim Management Statement
Ultra Electronics Trading Statement

*Hargreaves Lansdown will provide research updates on these events

Lloyds Banking Group

As the FTSE 100 bank most heavily exposed to the UK economy, Lloyds has benefitted from the surge in domestic stocks since the Prime Minister announced an election to be held on the 8th June. However, it’s not clear that an early election has changed all that much for the UK’s banks.

The focus of Lloyds’ first quarter results next Thursday remains broadly unchanged. The goal will be to keep costs flat or falling as income remains steady. One significant change we might see is a rise in the level of impairments (bad loans). However, defaults are currently at historically low levels so it’s likely any increase would have little effect on the group.

In the medium term a slowdown in the UK economy, that sees bad loans rise and demand for new loans slow, remains the bank’s biggest risk. The recovery in sterling we have seen in recent days helps to ease some pressure, but a sustained downturn would hit the bank’s ability to generate capital and thus pay the generous special dividends that it has recently provided to shareholders.

View the Lloyds Banking Group factsheet

Register for Lloyds Banking Group updates


Astra has carried out a number of ‘externalisation’ deals so far this year – essentially selling early stage drugs in return for an upfront fee and a share of future revenues. That should keep earnings ticking over, supporting the 4.75% prospective dividend yield.

Longer term the focus remains on the pipeline, and its updates here that will be the focus of most attention. Although a full readout from the MYSTIC trial isn’t expected until later this quarter, hints on progress could be seized upon by the market.

We do not expect Astra to alter the guidance it gave in February for a low to mid teens percentage decline in core earnings per share this year – it’s 2018 that really counts. However, progress the group is making on reducing Selling, General and Administrative (SG&A) costs will be of interest.

View the AstraZeneca factsheet

Register for AstraZeneca updates


Investors in the world’s largest advertising and media agency have enjoyed a pretty serene few years. A string of bolt-on acquisitions, combined with underlying earnings growth, have helped the shares rise while the dividend has been increased year after year.

2016 may have brought another year of impressive growth, with net sales increasing by 3.1% on a like-for-like basis, but a slower start to 2017 gave full year results a more downbeat tone. Sales momentum slowed across the UK, Europe and the US at the back end of the year, while like-for-like net sales growth was just 1.2% in January. The shares dropped 8% on the day of results.

In light of this, and the cautious economic outlook provided in full year results, it will be interesting to see what the group reports for its first quarter as a whole.

View the WPP factsheet

Register for WPP updates

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Contributors to this article hold shares in Lloyds and AstraZeneca.

Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by Thomson Reuters. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Past performance is not a guide to the future. Investments rise and fall in value so investors could make a loss.

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research disclosure for more information.

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  • 20 April 2017
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Investment notes
No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.