Next week on the stock market

Vodafone tests momentum amid Germany struggles

Vodafone heads into its half-year results with an optics problem. Core markets like the UK and Germany have been under pressure, and while turnaround efforts are underway, progress has been slow. The company has responded with bold moves, job cuts, the completed merger with Three UK, and divestments in Spain and Italy, but investors want evidence these changes are starting to pay off.

We welcome the strategic reset, but execution risk remains high. Next week’s results need to show improving trends in broadband and mobile, particularly in those core European markets that dragged in the first quarter. With full-year guidance pointing to basically no growth in cash profit (EBITDA), investors will be hoping for something to get excited about.

Progress on Aviva’s Direct line acquisition in focus

Aviva has had a strong first half, with operating profit up 22% to £1.1bn, driven by General Insurance in the UK & Ireland, strong Wealth net inflows and Health insurance momentum. The recent acquisition of Direct Line is expected to further strengthen its position in the UK motor and home insurance markets.

As Aviva heads into its third-quarter results, investors will be looking for signs that this momentum has continued, for UK & Ireland General Insurance and Wealth net flows in particular. Updates on integration progress at Direct Line will also be a key area of focus. Third-quarter volume headwinds are expected for Aviva's life business, driven by lower bulk-purchase annuities and protection business, while growth in non-life should be supported by the inclusion of Direct Line within the reported figures.

A director of Hargreaves Lansdown Group Limited is a Non-Executive Director of Aviva plc.

Rolls-Royce looking to continue stellar first-half growth

Rolls-Royce is all set to release its third-quarter trading statement next week following a stellar first-half performance that showcased strong growth across all divisions. In the first half, revenue rose 11% to £9.1bn, with gross margin expanding to 28.4% and operating profit surging 50% to over £1.7bn. Growth was broad-based, with contributions from Civil Aerospace, Defence, and Power Systems.

The continued recovery in global air travel has been a major tailwind for the Civil Aerospace division, while heightened geopolitical tensions and increased government spending are supporting steady demand in Defence and Power Systems.

Next week’s update will be closely watched for signs that this positive momentum has been sustained through the third quarter. Market forecasts point to full-year underlying revenue growth of around 11% to £19.5bn, while underlying operating profits are expected to grow at a faster pace of 32% to £3.3bn.

The author holds shares in Rolls-Royce.