FTSE 100 and FTSE 250 shares – what to expect on the stock market next week | Hargreaves lansdown

Among those whose results are currently scheduled to be released next week:

  • Imperial Brands’ Net Debt Levels Will Determine Dividend Growth Rate
  • We’ll see if Tesco still expects profits to return to pre-pandemic levels this year.
  • Greggs hopes to generate sales growth despite rising input costs and supply chain disruption

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FTSE 100, FTSE 250 and other selected actions scheduled for release next week:

04-Oct
No FTSE 350 reporter
05-Oct
Gregg Third Quarter Trading Report

* Events about which we will inform investors.

Imperial Brands – Sophie Lund-Yates, Equity Analyst

The decline in smoking isn’t the only headwind Imperial faced in the second half. The group will also see some of the tailwinds linked to Covid dissipate as tax obligations rise and currency headwinds eat away at profits. Despite this, management expects modest growth in underlying earnings – we wonder if that’s still the case.

In Europe, the reopening of many travel routes should see duty-free airport sales start to recover. In the United States, we will be monitoring the performance of cigars. The segment performed well in the semester, but this can be explained in part by the easing of supply chain issues. The second half should confirm whether this rise can continue in the face of more difficult comparisons. We also look forward to seeing the performance of the group’s next generation products as the group continues to invest in heated tobacco and steam products.

That brings us to Imperial’s potential 9.3% dividend yield – a big part of the investment case. Remember that returns are variable and are not a reliable indicator of future income. Management said it plans to transfer more excess cash to investors once net debt drops to 2.0-2.5 times cash earnings. At the last check the group was a little over that.

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Tesco – Sophie Lund-Yates, Equity Analyst

Tesco expects retail operating profits to return to pre-pandemic levels this year. It comes after the huge additional costs associated with the company’s exit from the pandemic, including hiring an army of additional staff, took a toll on operating profit. We will know next week if the group is still on track to achieve this goal.

Of course, sales growth will be an important pillar. Like-for-like sales were up 1.1% in the first quarter. This is because the group exceeds the exceptional demand observed at the start of the blockages. We wonder if Tesco was able to drive sales up in the second quarter, especially online sales. Recently, a lot of money has been spent on digital expansion. Tesco therefore needs equivalent online sales growth. We also wonder if the recent oil crisis will have an impact on Tesco’s annual outlook.

Finally, we’ll be keeping an eye on Tesco Bank. The pandemic hit lending activity, resulting in an increase in bad debt provisions. This took a toll on the division’s earnings and we would like to see if this trend is reversed.

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Greggs – Nicholas Hyett, Equity Analyst

If Greggs’ half-year results are valid, next week’s results should see sales a touching distance from the pre-pandemic level of 2019. Profits were set to do even better.

However, the big unknown for the third quarter is cost inflation. Food input inflation was already on the rise 3 months ago, but well-reported labor shortages and supply chain disruptions in the economy have likely increased this pressure.

Nevertheless, with the launch of new products, the opening and delivery of new stores which are also proving popular, the group hopes to be able to continue to offer the impressive growth integrated with the market expectations.

See the Greggs share price, charts and our latest look

Unless otherwise stated, estimates, including potential returns, are a consensus of analyst forecasts provided by Refinitiv. These estimates are not a reliable indicator of future performance. Past performance is no guarantee for the future. The value of investments goes up and down, so investors could suffer a loss.

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