Next week on the stock market

What to expect from a selection of FTSE 100, FTSE 250 and selected other companies reporting next week:

• Barratt Developments will be looking to build on last year’s performance
• Nestle looks to keep a grip on volumes at it pushes prices higher
• As strikes hit competitors, have auto margins bottomed out at Tesla?

Among those currently scheduled to release results next week:

*Events on which we will be updating investors

Barratt Developments – Aarin Chiekrie, Equity Analyst

Next week’s trading statement will give us an early peek into Barratt Developments’ first-quarter performance. We expect to see sales rates down by double-digits year-on-year, with pricing remaining relatively robust. Build cost inflation’s also expected to cool from 9-10% to around 5% this year, and we’re keen to hear if this has begun to materialise yet. Any early progress on this front would provide a welcome relief to margins.

For the full year, Barratt expects completions to be in the 13,250-14,250 range, weighted slightly towards the second half. That implies a decline of around 17-23% from last year, highlighting the fact that buyers are less willing to step onto the property ladder in the current high mortgage rate environment. But a mammoth net cash position of £1.1bn at the last count gives Barratt plenty of cushion against a near-term market slowdown.

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Nestle – Matt Britzman, Equity Analyst

Price vs volumes, that’s the game Nestle’s playing right now as it tries to combat higher input costs. To its credit, the strong suite of brands and exposure to resilient markets like pet care, health and coffee have held it in good stead. Consensus is looking for 8.1% organic growth over the first 9 months in next week’s third-quarter results, with higher prices offsetting a tiny decline in volumes.

Management remains committed to the idea that price hikes are pass-through, with higher volumes and better margin products the way to drive shareholder value – we tend to agree.

Commentary on the outlook for the rest of the year will be key. Volume comparisons should hopefully get easier from the fourth quarter on, and we expect some benefits to feed through from the increased advertising spend and streamlined product range toward the end of the year, although of course there are no guarantees.

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Tesla – Matt Britzman, Equity Analyst

While strikes rage on at key competitors, Tesla’s been able to stay out of the immediate firing line. It’s been able to avoid unionisation so far. Largely due to the stock options its workers have access to, which have proven more lucrative than the potential for higher base pay bargained by the union. That doesn’t mean there won’t be any impact, Tesla workers may start to question the potential upside for equity from here and there’ll no doubt be added wage pressure for the wider sector.

Back to the day-to-day, third-quarter margins will come under scrutiny in next week’s earnings release. There was chatter that second-quarter margin weakness could mark a low point. But the recent miss on deliveries, alongside ongoing price actions to help stoke demand, leaves plenty of question marks about where margins will settle.

We’ll be keeping our eyes peeled for further information on demand and availability for the new model 3, as well as an update on the potential for Cybertruck deliveries in the fourth quarter. Both of which could act as tailwinds toward the end of the year.

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