Next week on the stock market

Among those currently scheduled to release results next week:

• Will ASML continue to defy the semiconductor slowdown?
• Will Heineken's sales growth begin to flatten?
• We’ll find out if a boost in streaming spending has helped Netflix

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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.

ASML – Derren Nathan, Head of Equity Research

Despite difficulties in the wider semiconductor market, ASML’s virtual monopoly over certain types of advanced equipment for chip manufacturers helped the group continue to grow sales last year. However, margins were held back by factors including increased operating and research and development costs. Next week’s first quarter results should give some colour as to where margins are heading in 2023.

The 67% increase in order backlog to $40.4bn was enough to give management the confidence to guide for accelerated sales growth of 25% for this year. For the first quarter ASML expects revenue of between €6.1bn to €6.5bn including €1.5bn of revenues generated by its already-installed base of lithography machines (think replacement parts and servicing).

Whilst it doesn’t make chips itself, we’ll be looking to see whether scaled back production plans by troubled industry players such as Samsung have impacted the company’s outlook. We would also like to get clarity over the impact of additional Dutch export bans on certain of ASML product lines to China. Last year China made up 14% of total revenues.

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Heineken – Aarin Chiekrie, Equity Analyst

Heineken has shown the benefits of having strong brands during tough times. Despite a challenging economic backdrop, high-end favourites such as Heineken, Birra Moretti, and Amstel have helped drive the top line higher. When it comes to raising prices, brand power is key – allowing the group to raise prices by around 14% to combat inflation. This was a major factor in full year revenues rising 21.2% to €28.7bn, excluding the impact of exchange rates.

Next week’s trading statement will give us an early indication as to how sales levels are holding up in the new year. The main concern is if any real deterioration of beer demand comes to pass. Heineken’s sales and profits are already expected to moderate next year, flattening down to more sustainable levels of growth in the single digits. We’ll be keeping an eye out for any surprises either way on this.

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Netflix – Sophie Lund-Yates, Lead Equity Analyst

There are some tailwinds blowing in Netflix’s favour as we look ahead to next week’s earnings. It seems people are spending more on streaming as they look to economise during the cost-of-living crisis. This clearly has potentially positive ramifications for the media giant, as does the continued roll out of its lower-priced ad-supported tier. This could help entice, and retain, consumers who are counting their pennies.

Netflix is expecting to add fewer subscribers than the target-busting 7.7m added last quarter, but revenue growth’s expected to be 8% ignoring exchange rates. We’re cautiously optimistic this target will be achieved given the helpful shift in social behaviour.

That said, as ever, competition remains tough in the sector, meaning nothing’s guaranteed. With Netflix’s valuation enjoying a 16% uplift since the start of the year, the pressure’s on.

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