So investors are particularly interested to see how these companies have navigated the latest months. We expect there to be some surprises.
Many more companies are of course reporting, like Alphabet in the US, but we are highlighting the UK stocks under Morningstar’s coverage. This includes the majority of the FTSE 100. Throughout the week, our analysts will be publishing their takes on the results.
In the last full week of July, 17 companies that Morningstar covers are reporting. The biggest days in the calendar are Wednesday and Thursday, with five companies publishing results on each. The biggest company reporting is AstraZeneca (AZN), which will deliver its half-year and second-quarter results on Friday. So far this year, the stock is down almost 8%; the company was up on the year until recently, when the company published drug trial results that did not quite live up to expectations. This has left the FTSE 100’s largest constituent slightly undervalued according to Morningstar’s analysis.
Earlier in the week, Unilever (ULVR) will also deliver both Q2 and H1 results, plus update investors on its upcoming dividend payment for the second quarter – due to be paid on the last day of August.
Among all these stocks, only one does not pay a dividend (Just Eat (JET)). We will have more coverage of the top moaty FTSE dividend payers at the end of the month – and after these 17 companies have published their earnings.
Overall, there seems to be a growing confidence in the economy by UK businesses. Earlier this month, a report from the business advisory and accountancy firm BDO stated that Bosses in the UK are now more upbeat about their businesses and hiring intentions amid the early signs of falling inflation, than they have in the past 10 months.
Crunch Times
But there’s no doubt the UK is at a crunch point economically, and our biggest companies are at the heart of this. Inflation may be falling but it’s still very high, especially in food, and mortgage rates have soared this year.
As investors we want FTSE 100 companies to do well and make profits but as consumers we want this to be fair and proportionate. Banks are a key example: top executives have been to Downing Street recently to explain why they’re not passing on higher rates to savings customers. As an election looms, the government wants to be on the front foot and tackling issues close to voters – before the banks, supermarkets were in the line of fire over claims they’re passing on too much of their rising costs to shoppers.
Policymakers and bosses will be hoping these issues solve themselves, but this sense of “job done” will not be visible in the coming earnings reports. Naturally time-lagged, second quarter earnings will have some forward-looking insights though – and that’s what investors will be parsing the RNS for. Company statements are usually upbeat and vague but it will be hard for them to duck the obvious key issues.
We want to know: do companies think inflation has already started to peak, is the UK likely to avoid recession this year – and the linked question is how well the consumer is bearing up? The banks are usually good for the first two questions, while Reckitt and Unilever will be useful for the third – and they’ll also be able to give us an idea of how price rises for consumer staples have affected demand. Global companies like Glaxo and Astra will be able to give a wider insight into international issues like trade, regulation and healthcare.
