Next week on the stock market

Among those currently scheduled to release results next week:

• Meta will reveal how much damage Apple’s new privacy settings have done to the top line
• Amazon will hope to make a better impression on the market
• Compass Group will look to keep margins moving in the right direction

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FTSE 100, FTSE 250 and selected other stocks scheduled to report next week:

*Events on which we will be updating investors.

Meta – Laura Hoy, Equity Analyst

User growth tends to be the highlight anytime Facebook parent Meta releases results, but this time around investors will have their eyes on revenue growth. The group warned that Apple’s iOS privacy features could hurt the top line, and investors will be keen to see just how much. Meta’s expecting revenue to be between $31.5bn and $34bn, which would reflect a 12-21% year-on-year increase. That might not sound like a negative, but when investors are used to revenue growth of 30%+, it’s a disappointment. Investors will be looking for revenue at the top end of that guidance as well as management’s plans for a workaround that will protect the group’s revenue stream.

That’s not to say user growth won’t be important. Investors will also have an eye on monthly average users, which were up 6% in the latest quarter. User growth is an important part of Meta’s strategy, so keeping new signups ticking over is key.

We’re also keen to hear any updates on Meta’s plans for its messaging services, which it has yet to meaningfully monetize. This could be a source of untapped potential for Meta, so any indication the group’s getting ready to turn on that tap would be welcome news.

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Amazon – Sophie Lund-Yates, Equity Analyst

Amazon disappointed last quarter, with sales and profits coming in behind expectations. The huge increase in demand over the pandemic means Amazon is investing heavily in new infrastructure, which is partly what knocked profits. This spending won’t unwind overnight. Instead, what’s important is whether profits hit the mark analysts are expecting. Current forecasts are for operating profits of $2.6bn, with Amazon itself predicting anywhere from $0 - $3.0bn.

Covid created near-perfect conditions for Amazon’s online retail operation and cloud-based office products. As life has tentatively started to get back to normal, we wonder if Amazon has any updates to guidance now that a lot of physical shops are open and people are returning to the office.

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Compass Group – Matt Britzman, Equity Analyst

An impressive focus on cost savings means margins - while dented - didn't completely collapse during lockdowns for contract caterer Compass Group. At 4.5% last we heard, there’s a lot of work left to do before the group returns to its target of over 7%. The group’s looking to pass 6% this year, though it has already warned trading will be weighted toward the second half. Nevertheless, we’d like to see some signs of progression.

Revenues at the half year mark are expected to come in some 30% up on the same period last year. We’re interested to hear whether restrictions and an increase in Omicron fear over the past few months has impacted sales. And, if so, whether that’s likely to continue into the second quarter.

Markets are expecting good things from Compass, trading on a price/earnings multiple some way above its long term average. The group needs to keep the earnings recovery going or the valuation will come under pressure.

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