With the earnings season in full swing, investors have a lot to digest on the London market this Wednesday. Lloyds Banking Group (LON:LLOY) and J Sainsbury (LON:SBRY) are shining in an otherwise lacklustre FTSE 100, while Just Eat (LON:JE) and Persimmon (LON:PSN) are in the doldrums. Tomorrow also promises a lot of UK stocks action, with Royal Dutch Shell’s (LON:RDSA) results and a likely stormy annual general meeting (AGM) at Barclays (LON:BARC) on the cards.
Today’s movers & shakers
Sainsbury’s has been the biggest FTSE 100 riser in percentage terms in today’s trading after reporting a 7.8-percent rise in underlying profits for the 2018/19 financial year, and announcing that it had reduced its net debt by £222 million, ahead of its target. The news marks a boost for the company, whose shares tumbled last week as the UK competition watchdog blocked its proposed merger with Walmart’s Asda, calling into question the FTSE 100 company’s strategy. Sainsbury’s shares are up by more than four percent intraday, while the rise has also fuelled support for peers Tesco (LON:TSCO) and Morrisons (LON:MRW).
Lloyds meanwhile is trading about one percent higher, after reporting that it would lower its target for its Common Equity Tier 1 (CET1) ratio following regulatory changes. The news has spurred hopes that the bailed-out lender will move to return the extra money to investors. Bloomberg News notes that Jefferies analysts Joseph Dickerson and Aqil Taiyeb have said that the Bank of England had cut its requirements more than the market expected, leaving Lloyds with about £1 billion of excess capital which could be used for a buyback this year.
London Stock Exchange (LON:LSE) has been another prominent FTSE 100 riser as it posted a five-percent rise in total income for the first quarter. Drugmaker GlaxoSmithKline (LON:GSK) meanwhile is one percent up in early afternoon trade as it posted a five-percent rise in Q1 sales at actual exchange rates, having benefitted from strong performance at its Vaccines division.
At the other end of the spectrum has been Just Eat (LON:JE), with the group’s shares changing hands two percent in the red. Reuters reports that analysts at JPMorgan have said that the online takeaway service’s European rivals Delivery Hero and Takeaway.com look more attractive.
Other UK stocks being sold off this Wednesday include Persimmon (LON:PSN) which is down about one percent intraday as the company posted a trading statement covering the period from January 1 to date. The blue-chip housebuilder disclosed a fall in its total forward sales revenue to £2.7 billion, compared with £2.8 billion in the prior-year period. The company further said that its weekly private sales rate per site since the start of the year was five percent lower than the previous year. The update comes against the background of ongoing Brexit uncertainty which has taken its toll on UK housebuilders.
Thursday’s UK stocks agenda
Investors will also have a lot to look out for tomorrow, with Lloyds set to hold the centre stage with its first-quarter results. IG reports that the lender is expected to report earnings of 2p a share, representing a 0.1-percent decline over the year, while revenue is forecast to have fallen by 1.5 percent to £4.5 billion. The market will be also awaiting more updates on the group’s capital return plans following today’s CET1 ratio update and lack of news on that front could disappoint and pressure the share price.
Royal Dutch Shell (LON:RDSA) is also reporting tomorrow, following FTSE 100 peer BP (LON:BP), which posted a fall in Q1 profits yesterday, reflecting weaker oil prices. Nasdaq.com reports that the Zacks consensus estimate for Shell’s first-quarter revenues is pegged at $83 billion, suggesting a fall from $91 billion in the prior-year quarter, while earnings per share are forecast at $1.05, implying an 18-percent decline from the year-ago number.
The forecast suggests that the Anglo-Dutch energy giant is also suffering from a fall in crude prices. Earlier this week, The Telegraph reported that analysts had warned that oil market jitters could wipe around $12 billion off the income statements of Europe’s 12 largest oil firms for the first three months of the year.
Other blue-chips reporting tomorrow include asset manager Schroders (LON:SDR), consumer goods group Reckitt Benckiser (LON:RB), bottler Coca-Cola HBC (LON:CCH) and artificial hips and knees maker Smith & Nephew (LON:SN).
Investors will also keep an eye on Barclays, which is scheduled to hold its AGM tomorrow. The blue-chip lender has been under pressure from activist investor Edward Bramson, who has made a bid for a board seat, and who has been urging the bank to streamline its investment banking business. Bramson’s Sherborne Investors vehicle owns just over five percent of Barclays. Shareholder advisory groups ISS and Glass Lewis have recommended that shareholders vote against the activist investor’s bid, while PIRC is advising investors to abstain.
London Stock Exchange, RELX (LON:REL), Rightmove (LON:RMV) and Unilever (LON:ULVR) will be under pressure tomorrow, with the companies going ex-dividend.
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