Next week on the stock market

Among those currently scheduled to release results next week:

• DS Smith will reveal if it’s been able to offset inflationary pressure with price increases.
• Forward sales will be the metric to watch when Vistry reports amid concern that the housing market is cooling.
• EMIS looks to build on growth delivered during the pandemic.

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

*Events on which we will be updating investors.

DS Smith – Sophie Lund-Yates, Equity Analyst

For box-maker DS Smith, striking a balance between rising input costs and increased output is the key challenge. We’re expecting to see a huge year-over-year volume increase for the first quarter owing to the pandemic-related weakness baked into last year’s figures. But the group should be at or close-to pre-pandemic levels, putting it on-track to outperform 2019 sales.

Volumes improved through the second half of last year, but management flagged inflation as a potential challenge. The increase is expected to be passed seamlessly on to customers, most of which will likely stomach the higher bill. Three months isn’t long enough to say the strategy is iron-clad, but next week should give investors some idea of whether or not things are going to plan.

Executing on this balancing act is essential if the group is to live up to its prospective 3.4% dividend yield - a big part of the investment case. Remember that yields are not a reliable indicator of future income.

See the DS Smith share price, charts and our latest view

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Vistry – Sophie Lund-Yates, Equity Analyst

If peers’ results are anything to go by, we’re pretty confident that Vistry’s half-year results will outline a strong performance. The UK’s housing market has been on fire over the past six months, buoyed by pent-up lockdown demand, affordable mortgages and the stamp duty holiday. Vistry has likely capitalised on the situation.

We’re most interested in where things are headed. Forward sales will be a key metric to watch as it offers a glimpse into whether demand is starting to wane. With the stamp duty holiday wrapping up, there’s concern that the market may be starting to cool.

The most recent HRMC data showed property sales slowed considerably in July, as some of the government’s helpful schemes draw to a close. We’d like to hear Vistry’s take on the situation and get a sense of whether prices are holding up in the absence of tax savings incentives.

See the Vistry share price, charts and our latest view

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EMIS – Nicholas Hyett, Equity Analyst

EMIS’ management have said that they were heading for “business as usual”, with trading actually slightly ahead of expectations and better than pre-pandemic.

While we expect EMIS Health – the group’s core business selling software to GP surgeries – to have done well this year, it’s unlikely to deliver transformative growth. After all the group already services 57% of GPs in the UK.

Instead it’s EMIS Enterprise, which includes patient-facing services, analytics and pharmacy services, which we think is the engine for future expansion. In particular its Patient Access business has enjoyed very rapid growth over the pandemic – as patients increasingly require digital access to NHS services. We suspect that trend could continue to gather pace even now the pandemic is subsiding.

See the EMIS share price, charts and our latest view

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Unless otherwise stated estimates are a consensus of analyst forecasts provided by Refinitiv. These estimates are not a reliable indicator of future performance. 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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