Next week on the stock market

Among those currently scheduled to release results next week:

• Can Tate & Lyle keep the magic formula working?
• Will Microsoft spark a new era for artificial intelligence?
• Will Diageo still be raising a glass to growth from its premium brands?

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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.

Tate & Lyle – Matt Britzman, Equity Analyst

First half performance from Tate & Lyle showed resilient demand and a good control on costs, which ultimately helped sales and profits push higher.

Acquisitions are a key part of management’s plans, and the balance sheet’s sitting in a very healthy position following free cash flow of £62m over the first half. We wouldn’t be surprised to hear news of more add-on acquisitions in next week’s trading statement.

There were some headwinds though. Supply chain issues lingered, strikes in Europe hurt Food & Beverage Solutions (FBS) volumes and performance from the Primient joint venture was a little lighter than expected. Whilst supply chain issues may linger, we’re hoping to hear positive news on FBS and Primient. The latter of which should start to benefit from price hikes over the second half.

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Microsoft – Matt Britzman, Equity Analyst

Microsoft will be hoping to get 2023 off to a better start than it ended 2022 when it reports second quarter results next week. Back in October, markets were disappointed by a lacklustre first quarter that saw profits fall due to a combination of higher costs and softer demand.

We’re expecting to see second quarter revenue of $52.35-$53.35bn, a miss could add pressure considering this guidance was already some way below expectations when it was issued in October.

We’ll also be on the lookout for any information about the potential acquisition of a stake in OpenAI, for around $10bn. OpenAI grabbed headlines with the launch of ChatGPT, an AI system that can answer questions in a human-like interaction.

The implications of the underlying technology could be far reaching and this deal, along with the implied valuation of OpenAI, mark a potential turning point for broader adoption of artificial intelligence.

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Diageo – Derren Nathan, Head of Equity Research

The Guinness producer has a portfolio of well-known brands that include the likes of Baileys, and Johnnie Walker Whiskey, as well as emerging no and low alcohol products. Last year’s performance benefitted from double digit growth in both price/mix and volumes. Drivers included strong demand from drinkers returning to pubs and restaurants, and a particularly good result from Diageo’s higher end brands.

Overall revenue growth is set to have slowed somewhat. But last we heard, Diageo had enough confidence in its brand power to re-iterate its medium-term guidance of organic net sales growth in the range of 5% to 7%, and organic operating profit growth between 6% to 9%, out until 2025. The forthcoming half year results will reveal whether Diageo remains on track to meet these targets in the face of a challenging economic and geopolitical environment.

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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.

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