The third-quarter earnings season is well under way, with companies across a range of sectors due to report in the coming week.
Tesla is set to take centre stage next week, as investors await the latest set of results from Elon Musk’s EV company, on the back of its recent robotaxi event.
In the world of finance, the focus so far this earnings season has been on the major US banks, but it is now the turn of UK giants Lloyds, Barclays and NatWest to report in the coming week.
Meanwhile, French cosmetics company L’Oréal is set to release its third-quarter sales figures.
Investors will also be looking to see if momentum from Coca-Cola’s strong second quarter has carried on into its latest set of results.
Consumer goods company Unilever will also be in focus, as investors keep an eye out for further progress on the business’ growth action plan.
Here’s more on what to look out for:
Tesla (TSLA) — Reports third-quarter results on Wednesday 23 October
Shares in Tesla slumped after its recent robotaxi event, in which the electric carmaker revealed its fully autonomous “Cybercab”, as well as unveiling its “Robovan” concept.
A lack of details surrounding the rollout plan and regulatory approval, plus no mention of a more affordable regular EV, left Wall Street wanting more. This most recently volatility in the stock, has left shares down nearly 11% year-to-date.
In fact, AJ Bell’s Russ Mould, Danni Hewson and Dan Coatsworth point out that Tesla is the only one of the “Magnificent Seven”, which includes tech giants such as Apple (AAPL) and Microsoft (MSFT), to have seen such declines over the past year.
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“Indeed, the shares are down by almost 50% from their 2021 peak, despite ongoing investor enthusiasm for electric vehicles and autonomous driving and — more specifically to Tesla — the Cybertruck, Cybercab and the roll out of its supercharger network,” they said.
That said, recently released figures showed that Tesla’s deliveries were up 6% for the third quarter. AJ Bell’s investment experts noted that this “understandably led analysts to expect better again for the third quarter” results more broadly.
They said analysts were expecting sales to come in at $25.5bn (£19.5bn) for the third quarter, which would be 9% higher than a year ago.
Analysts are also said to be expecting to see further improvement in earnings per share (EPS) of $0.57 in the third-quarter, which would mean a return to year-on-year growth. Tesla’s EPS of $0.47 in the second quarter missed expectations and was below the $0.78 it generated for the same period in the previous year.
Lloyds Banking Group (LLOY.L) — Reports third-quarter results on Wednesday 23 October
Three big UK banks are set to report this week, with Lloyds kicking things off on Wednesday, followed by Barclays (BARC.L) on Thursday and NatWest (NWG.L) on Friday.
“The banking sector has shown good performance in the past year, despite the shallow recession in the UK in the second half of 2023,” said AJ Bell’s Mould, Hewson and Coatsworth.
Across those three banks alone, they said that stated pre-tax profit is expected to be generally flat in 2024 and 2025, at around £20bn.
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“Thanks to the combination of competition, interest rate cuts from the Bank of England and political and public pressure, net interest margins and net interest income look to have peaked and that is a key reason why analysts think the banks may struggle to grow earnings substantially from here onwards,” they said.
Looking at Lloyds specifically, the consensus estimate on its headline pre-tax income for the third quarter is £1.6bn, versus £1.9bn for the same period last year.
In the second quarter, the bank delivered pre-tax profit of £1.7bn, which was higher than the £1.6bn it generated in Q2 2023 and beat market expectations of £1.58bn.
In terms of dividends, Lloyds is forecast to pay just over 3p a share, which added to its declared £2bn buyback programme, gives a total cash return of £3.9bn for 2024.
Year-to-date Lloyds Banking Group shares are up 29%.
L’Oréal (OR.PA) — Reports quarterly sales figures on Tuesday 22 October
The world’s largest cosmetic’s company, L’Oréal is set to report after the market close on Tuesday.
Shares have been under pressure this year, down more than 17% year-to-date, with it seeing further declines after the release of half-year results at the end of July.
While L’Oréal reported that like-for-like sales had risen 7.3% to €22.1bn (£18.4bn) in the first half, the company noted “depressed beauty demand in China” amid its economic slowdown.
In terms of its third quarter, Barclays’ equity research team said in a note released on Friday that it was looking for organic sales growth of upwards of 6.2%.
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Barclays’ team said the focus would be on the US consumer in these results and highlighted that growth in its fragrance business “remains strong and continues to outperform other categories with some share gains for L’Oréal”.
The team said they had hoped for a rebound in cosmetics in China in the second half of the year “but that now seems unlikely given the current weak state of Chinese consumer confidence”.
Overall, they said that L’Oréal’s valuation looks “undemanding” relative to where it’s stood historically and that “conversations with investors suggest many are tempted to add or buy at these levels”.
“We see risks as skewed to the upside, with expectations low and any sense of sequential stabilisation likely well received,” they added.
Coca-Cola (KO) — Reports third-quarter results on Wednesday 23 October
Shares in soft drinks company Coca-Cola hit an all-time high closing price last month of $73.01 per share, with the stock up 19% year-to-date.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said that the company’s second-quarter results in July “blew the lid off market expectations”.
Coco-Cola reported net revenues were up 3% in the second quarter to $12.4bn, while organic sales grew by 15%.
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This led management to upgrade full-year guidance for the second time this year, expecting organic revenue to grow between 9% and 10% in 2024.
“When the group reports results next week, investors expect to hear that some of this momentum has spilled into the third quarter,” Chiekrie said. “But Coca-Cola’s rolling into some tough comparable periods for growth over the second half of the year, so don’t expect the same level of positive surprise as in the first half.”
He added: “Cash generation remains very healthy, providing scope for increased share buybacks and potentially even new acquisitions in the near to medium term.”
Unilever (ULVR.L) — Reports third-quarter results on Thursday 24 October
Consumer goods giant Unilever has been trading close to five-year highs, point out AJ Bell’s investment experts, as investors “respond favourably to chief executive Hein Schumacher’s growth action plan”.
The plan, launched in March, will see the group spin off its ice cream business, cut €800m in costs — which includes 7,500 redundancies — and invest heavily in its thirty “power brands”.
Unliever’s group underlying sales are forecast to have risen by 4.2% in the third quarter, up slightly from 3.9% in Q2. Meanwhile, stated revenues are forecast to have risen by 1.5% to €15.5bn.
AJ Bell’s Mould, Hewson and Coatsworth point out that Unilever’s “long-term target range for sales growth is 3% to 5% a year and current guidance from Mr Schumacher is for underlying sales growth to come within that range in 2024 overall”.
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While they said that Unliever may not offer too much detail on profits, analysts will look for any comment on its underlying operating margin for the year, which it had said was expected to exceed 18% versus 16.7% last year.
“Analysts will also look for an update on the planned demerger of the ice cream business, which is due to occur by the end of 2025, especially with regard to whether the company will list its shares in London or Amsterdam,” they said.
In addition, AJ Bell’s investment experts said that shareholders will be keeping an eye out any further hints of wider merger and acquisition activity, “given Mr Schumacher’s plan to make selective purchases and also prune the range of brands by means of disposals.”
Other companies reporting this week include:
Monday 21 October
Tristel (TSTL.L)
SAP (SAP.DE)
Sandvik (SAND.ST)
Tuesday 22 October
Virgin Wine (VINO.L)
InterContinental Hotels (IHG.L)
Gear4Music (G4M.L)
China Mobile (600941.SS)
SK Hynix (000660.KS)
Deutsche Boerse (DB1.DE)
Logitech (LOGN.SW)
Saab (SAAB-B.ST)
Randstad (RAND.AS)
GE Aerospace (GE)
Danaher (DHR)
Verizon Communications (VZ)
Philip Morris International (PM)
Texas Instruments (TXN)
RTX (RTX)
Lockheed Martin (LMT)
3M (MMM)
Freeport-McMoRan (FCX)
General Motors (GM)
Kimberly-Clark (KMB)
CoStar Group (CSGP)
Baker Hughes (BKR)
Seagate (STX)
Packaging Corp (PKG)
Interpublic (IPG)
Wednesday 23 October
Reckitt Benckiser (RKT.L)
WPP (WPP.L)
Barratt Redrow (BTRW.L)
Fresnillo (FRES.L)
Hong Kong Exchanges (0388.HK)
Roche (ROG.SW)
Atlas Copco (ATCO-A.ST)
Iberdrola (IBE.MC)
Kering (KER.PA)
Heineken (HEIA.AS)
Assa Abloy (ASSA-B.ST)
Akzo Nobel (AKZA.AS)
Deutsche Bank (DBK.DE)
Michelin (ML.PA)
Carrefour (CA.PA)
Volvo Cars (VOLV-B.ST)
SSAB (SSAB-B.ST)
Saipem (SPM.MI)
Viscofan (VIS.MC)
AT&T (T)
IBM (IBM)
LAM Research (LRCX)
Boeing (BA)
Amphenol (APH)
GE Vernova (GEV)
Newmont (NEM)
United Rentals (URI)
Teradyne (TER)
Otis Worldwide (OTIS)
eBay (EBAY)
Mattel (MAT)
Thursday 24 October
RELX (REL.L)
London Stock Exchange (LSEG.L)
Anglo American (AAL.L)
Inchape (INCH.L)
Renishaw (RSW.L)
Essentra (ESNT.L)
Dunelm (DNLM.L)
Bloomsbury Publishing (BMY.L)
Luceco (LUCE.L)
Canon (7751.T)
Renasas (6723.T)
CNOOC (0883.HK)
Hyundai Motor (005380.KS)
Budweiser Brewing Company (1876.HK)
Hermès (RMS.PA)
UniCredit (UCG.MI)
Vinci (DG.PA)
Dassault Systèmes (DSY.PA)
Danone (BN.PA)
Beiersdorf (BEI.DE)
Kone (KNEBV.HE)
Orange (ORA.PA)
Alfa Laval (ALFA.ST)
Sodexo (SW.PA)
BE Semiconductor (BESI.AS)
Renault (RNO.PA)
Stora Enso (STERV.HE)
Union Pacific (UNP)
Honeywell (HON)
UPS (UPS)
Northrop Grumman (NOC)
Keurig Dr Pepper KDP (KDP)
Dow (DOW)
Western Digital (WDC)
Hasbro (HAS)
Southwest Airlines (LUV)
US Steel (X)
Friday 25 October
NatWest (NWG.L)
Airtel Africa (AAF.L)
Record (REC.L)
Fanuc (6954.T)
ICBC (601398.SS)
Ping An Insurance (601318.SS)
Great Wall Motor (601633.SS)
Sanofi (SAN.PA)
Safran (SAF.PA)
Porsche (PAH3.DE)
Mercedes Benz (MBG.DE)
Holcim (HOLN.SW)
ENI (ENI.MI)
Sika.SW (SIKA.SW)
SGS (SGSN.SW)
Konecranes (KCR.HE)
Rémy Cointreau (RCO.PA)
Kindred (KIND-SDB.ST)
Colgate-Palmolive (CL)
AON (AON)
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