When ITV announces its second quarter update on Tuesday investors are likely to be looking at the performance of its studio business and will want an update on recent acquisitions.
The group’s first quarter trading update saw management forecasting 5% growth in Net Advertising Revenue for the first half and over the past six months its stock has risen by 17%.
Graham Spooner, investment research analyst at The Share Centre, who calls the broadcaster a ‘buy’ says: “Trading reports so far this year have been positive, especially with regard to advertising revenue. Other areas to focus on will be cost controls and the outlook for the second half, which will include the Rugby World Cup.”
Looking to this week’s report, Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers adds: “Management expects to outperform the market over the full year, with a mixture of comparatives with the 2014 Football World Cup and the pending Rugby World Cup providing the current financial year backdrop. Adjusted pre-tax profit is forecast to grow by around 9% to £340m.”
Overall, prior to the release, analyst consensus opinion currently denotes a ‘buy’.
Following the recent shock departure of its chief executive Antony Jenkins, Barclays reports its second quarter/half year results on Wednesday. The share price has been steadily rising this year – up 16% over six months – in hopes that the restructuring will continue at a faster pace and benefit in the longer-term.
For Spooner, the business is a ‘hold’. He says: “Regulatory issues often dominate the headlines and take the focus away from the changes that management have been making. As ever the performance of its investment banking business Barclays Capital will be important. The first quarter, reported in April was stated as being its best in years and investors will want that trend to have continued.”
Marginally slower activity for the investment bank and generally similar trends for its retail business are expected compared to the first quarter notes Hunter. He says: “An update regarding provisions for foreign exchange investigations, litigation and PPI could feature, while management’s renewed push to increase revenues, cut costs and enhance shareholder returns following the departure of its CEO could again be underlined.
“In all, with legacy issues slowly being resolved, diversity of business type and geography still enjoyed and no UK government share stake overhanging, analyst consensus opinion continues to point towards a ‘strong buy’.”
Global drinks giant Diageo, up 2% over 12 months, follows up with its full year results on Thursday. The firm, which counts Guinness and Smirnoff amongst its suite of brands, has seen sales in some of its markets, both emerging and developed, struggle this year but for Spooner, it remains a ‘buy’.
He says: “At its last trading update in April it forecast no change in that situation so investors will be very interested in how trading is going. Other luxury goods groups have reported poor sales in China recently so it will be no surprise if Diageo is in a similar position. Any change of strategy in North America, where the group has changed its management team, and the level of operating efficiencies achieved will also be of interest to the market.”
Hunter notes that organic net sales growth in the region of 0.2% is currently forecast, -0.3% as of nine months, and pre-tax profit is expected to decline by around 11% year-over-year to £2.79 bn. He adds: “More favourably, trading for the group’s African business is likely to have remained buoyant, whilst management focus on cost reduction could be further emphasised.” However, overall, the analyst consensus opinion currently points towards a strong ‘hold’.
No comments:
Post a Comment