Next week on the stock market
What to expect from a selection of FTSE 100, FTSE 250 and selected overseas shares reporting next week.
This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.
14 August 2020
- Will BHP pivot future spending towards a low carbon future?
- Investors will focus on Persimmon's most recent trading and outlook
- NVIDIA’s reported to be courting Softbank as it eyes up computer chip maker ARM
FTSE 100, FTSE 250 and selected other stocks scheduled to report next week
|Cranswick||Q1 Trading Statement|
|BHP*||Full Year Results|
|John Wood Group||Half Year Results|
|KAZ Minerals||Half Year Results|
|Network International||Half Year Results|
|Persimmon*||Half Year Results|
|TBC Bank||Half Year Results|
|Hochschild Mining||Half Year Results|
|Antofagasta||Half Year Results|
|CRH||Half Year Results|
|Premier Oil||Half Year Results|
|No FTSE 100 or FTSE 250 reporters|
*Companies on which we will be writing research.
BHP – Emilie Stevens, Equity Analyst
Thanks to a recent full year production report, we’ve had a preview of what to expect next week. Production volumes and prices rose in the all-important Iron Ore division (51% profits last year). But it was a bit of a mixed bag elsewhere, with the group’s copper, petroleum and coal assets being hit by the oil price crash and coronavirus earlier in the year.
Despite this the miner kept costs under control and debt is expected to come in at the lower end of the $12- 17bn target range. This should mean good news for the dividend as BHP’s policy is to pay out at least 50% of profits.
We haven’t had an update on future capital expenditure plans, and, with 2020 seeing decarbonisation continuing to be a focus for investors, we’re keen to see if BHP have had a rethink of future spending plans. Petroleum has been a key focus of spending which does nothing to help its position as having the lowest exposure to the low carbon energy transition among the miners.
Persimmon – Emilie Stevens, Equity Analyst
We already know some of the key figures from Persimmon’s first half ending 30 June. Housing revenue was down 33% to £1.1bn on 4,900 completions, compared with 7,584 last year. We don’t know how this has impacted profits yet, but the balance sheet still had £830m of cash on it as well as £300m in credit.
The group’s outlook and any news on trading since the end of June are equally important. The Nationwide and Halifax house price indices both reported rising prices in July, which bodes well. We’ve said for some time that the housebuilding sector will stand or fall with the economy and so far the sector has held up, but the next few months will be crucial. The recovery could be beset by a second wave of coronavirus infections, the end of the furlough scheme or some other unfortunate development. So far the news has been encouraging on balance, but the sector still feels higher risk to us – and will until we know how the recovery shakes out.
We’ll also be interested to hear Persimmon’s views on the government’s proposed new planning scheme. If building becomes easier we’d expect competition to rise and margins may get squeezed – but the devil will be in the detail and we’re likely some way off the policy being implemented.
NVIDIA – Nicholas Hyett, Equity Analyst
This is likely to have been a good quarter for NVIDIA. It seems probable that lockdowns have boosted home working and gaming demand, while the rapid shift to cloud computing also bodes well for the group’s data centre products.
However, the really big news is that NVIDIA is in talks with Softbank to buy ARM, the computer chip company that was formerly the UK’s largest listed tech company. ARM’s chips are a major component in smartphones. Given NVIDIA’s already got a leading position in high end computer chips, throwing ARM into the mix would strengthen its low to mid-range offer.
The deal’s not cheap though. ARM cost Softbank $32bn back in 2016, and it could cost NVIDIA more. We would expect a detailed explanation of the deal rationale alongside results.
Unless otherwise stated estimates are a consensus of analyst forecasts provided by Thomson Reuters. These estimates are not a reliable indicator of future performance. Past performance is not a guide to the future. Investments and income they produce can 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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