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The week ahead: Lloyds Bank, Shell, ITV
By David Brenchley | Fri, 21st July 2017 - 16:06
There's plenty of action coming up, writes David Brenchley, ahead of reports from a number of stocks popular with retail investors, including Lloyds and oil major Shell.
Monday 24 July
Dialight, Reckitt Benckiser, Ascential, Tungsten Corporation, Cranswick, Temple Bar Investment Trust
Specialist Investment Properties, Solo Oil
Tuesday 25 July
Proteome Sciences, Domino's Pizza, Provident Financial, Rathbone Brothers, Croda International, Spectris, Tyman, Segro, Informa, PZ Cussons, Games Workshop, Intermediate Capital, Victrex, Gresham Technologies, Virgin Money, Pentair
TLA Worldwide, Mytrah Energy, Intermediate Capital, Big Sofa Technologies
Wednesday 26 July
One of the more interesting stories of the week could be media giant ITV (ITV), which has just announced easyJet (EZJ) chief Carolyn McCall will replace Adam Crozier at the top. Half-year results are due mid-week.
McCall will have plenty of challenges ahead of her, but she has vast experience in the sector from her stint at Guardian Media Group – a key consideration in her hiring, chairman Peter Bazalgette admitted.
Liberum analysts say the move "suggests the company is comfortable with its strategic direction, but [McCall's] strong personal links should be helpful in several areas". ITV is the firm's "top pick", with a price target of 320p, implying huge upside of 81%.
UBS is much less optimistic, with a 'sell' rating on the stock and 170p price target. ITV currently trades at 177p. The broker forecasts revenues for full-year 2017 of £3 billion giving pre-tax profit of £576 million, up 4% year-on-year.
Basic earnings per share (EPS) of 15.2p puts it on a forward price/earnings (PE) multiple of 11.6 times and a dividend per share of 11.02p yields 6.2%.
International Personal Finance, ITV, Staffline, Unite, Tullow Oil, Jupiter Fund Management, Hammerson, GlaxoSmithKline, GKN, Berendsen, Huntsworth, Centaur Media, Joules, Marston's, Sage Group, Paragon Group of Companies, Antofagasta, 3i Group, Compass, Brewin Dolphin Holdings, Robert Walters, PayPoint, Quartix
MITIE, FreeAgent Holdings
Thursday 27 July
Thursday is the biggie this week, with a plethora of popular stocks reporting. Kicking off will be high-street lender Lloyds (LLOY), with second-quarter results.
These will be impacted by the inclusion of the first month of earnings from its recent purchase, credit card lender MBNA. Deutsche Bank reckons that will contribute £55 million of income and around £25 million pre-tax profit, benefitting net interest margin by three basis points.
The interim dividend should be 0.95p, up 0.10p year-on-year, with a core equity tier 1 (CET1) ratio of 13.8%, down 50 basis points quarter-on-quarter, with earnings retention more than offset by dividend accruals and MBNA acquisition impact.
Analyst David Lock has a 79p target price on the stock, noting that Lloyds is trading at 1.2 times tangible net asset value for an underlying return on tangible equity of 13% in 2018 and a cash dividend yield of 7-8% in 2017/18.
Moving swiftly along, oil major Royal Dutch Shell (RDSB) will also be under the microscope Thursday.
Panmure Gordon's Colin Smith reckons second-quarter results will confirm the improvement in underlying performance from Shell and sticks a £25 target price on the stock, suggesting potential upside of 20%.
The analyst forecasts clean constant cost of supplies (CCS) earnings per share (EPS) of 43 US cents, down 6% quarter-on-quarter but more than treble last year's number.
"Moreover, cash flow should benefit from some $7.5 billion of cash disposal receipts as the fruits of the disposal programme flood in," he adds. "That in turn should help drive a significant reduction in gearing to 24.6%."
He says Shell should be able to turn off the scrip around the end of the year and restart buy backs in 2018.
Smith & Nephew, Bodycote, Inchcape, Schroders, Intu Properties, Rentokil Initial, St James's Place, British American Tobacco, Vesuvius, Weir Group PLC, Greencoat UK Wind, AstraZeneca, Telefonica, Royal Dutch Shell, RELX, National Express, Anglo American, Lancashire Holdings, Lloyds Banking Group, Indivior, Just Eat, Jardine Lloyd Thompson, Countrywide, Primary Health Properties, Torotrak, Sky, Renishaw, Angle, Diageo
CMC Markets, Volex Group, Orogen Gold, Etalon, Escape Hunt
Friday 28 July
UK Commercial Property Trust, Aberforth Smaller Companies Trust, UBM, Morgan Advanced Materials, IMI, Rightmove, International Consolidated Airlines, BT Group, Barclays, Clipper Logistics, Tate & Lyle, Sophos, Thomas Cook, Kaz Minerals, CMC Markets, Daily Mail and General Trust, Ladbrokes Coral
Amur Minerals Corporation, Boxhill Technologies, Bellzone Mining, Red Leopard Holdings, Subex
This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.