Look ahead to FTSE 350, other companies reporting & economic events 14 – 18 October 2024

• Bellway building positive sentiment as buyer confidence increases
• LVMH looks for a boost from China’s stimulus package
• ASML is banking on a step change in sales to keep revenue flat
• Whitbread looking for fewer sleepless nights as the restructuring drive continues  
• Netflix looks to continue to smash its box office financial performance

Bellway, Full Year Results, Tuesday 15 October

Susannah Streeter, head of money and markets, Hargreaves Lansdown

“Positive sentiment has been building around Bellway, as it’s considered to be in a good position to benefit from the UK government’s pledge to kickstart the building of 1.5 million new homes. Bellway is focused on building family homes, and the shaking up of the planning system and fast-tracking urban brownfield sites for development should help smooth its path for new sought-after developments. This presents more potential for the medium term, but looking to the immediate future, Bellway lifted its pricing forecasts following stronger trading through the key spring season.

Investors will want to see if its guidance for housing completions remains unchanged and will have a keen eye trained on its order book. Buyer confidence is increasing, helping lift reservation rates and when another interest rate cut comes, it should help boost sentiment further as better mortgage deals feed through. However, much of this optimism is already priced in and has been reflected in significant share price gains this year, so investors are set to be sensitive to any missteps ahead.”

LVMH, Q3 Trading Statement, Tuesday 15 October

Aarin Chiekrie, equity analyst, Hargreaves Lansdown 

“LVMH’s growth has come off the boil in recent quarters, as tough economic conditions have even seen some luxury shoppers controlling their budgets a bit more. Organic revenue growth’s still in positive territory though, up 2% to €41.7bn in the first half. Sales in the important Asia region made up almost a third of that total, of which Chinese consumers account for a significant chunk.

With the Chinese central bank having unleashed a wave of stimulus measures in late September, there’s been a fresh jolt of optimism around the outlook for LVMH. Although that has dissipated a little, the expansionary moves made by Chinese leaders are aimed at stimulating lending to help boost the overall economy. However, what could be a real game changer is if this is accompanied by fiscal stimulus to put more money in consumers’ pockets. It’s hoped that this will convince them to save less and spend more.

While it’s too early to tell if the Chinese stimulus package will help lead to a sustained economic recovery, investors will be keen to see if it’s enough to shift full-year sales guidance higher when LVMH releases its third-quarter update.”

ASML, Q3 Results, Wednesday 16 October

Derren Nathan, head of equity research, Hargreaves Lansdown 

“ASML’s revenues so far this year have been lagging levels seen in 2023. The company’s banking on a step change in sales of micro-chip manufacturing systems in the last two quarters of the year to keep 2024 revenue flat overall. The consensus of analyst forecasts for its third quarter results is for year-on-year revenue growth of 7% to €7.1bn. That’s slightly ahead of the mid-point of company guidance which itself disappointed the market when issued in July. 

Analysts are looking for a bumper end to the year to take up the slack, earmarking quarter-on-quarter growth of over 24% to €8.8bn in the final quarter, so we’ll be carefully monitoring Q4 guidance. ASML’s technology leadership leaves it well placed to benefit from long-term megatrends such as artificial intelligence. However, some of its key customers are facing their own challenges, so investors will also be looking for any pointers on next year’s outlook where growth is currently expected to accelerate further.”

Whitbread, Half Year Results, Wednesday 16 October

Susannah Streeter, head of money and markets, Hargreaves Lansdown

“Whitbread’s Premier Inn has become the UK’s largest hotel chain with a leading brand position in the value and mid-range hotel sector, but recently customers in the UK have seemed to be baulking at the higher prices which drove record levels of profits last year. On a like-for-like basis, UK accommodation sales fell 2% in the first quarter reflecting both lower occupancy and room rates, particularly in London. Food and beverage sales fell 1%, with strong in-hotel breakfast sales offset by softer trading at some of its branded restaurants.

A restructuring drive is underway to cut costs and refocus the business on hotels with integrated restaurants, and investors will want to see more progress on this. There were signs of a recovery at the end of the quarter, and management appeared confident that business will pick up as the year goes on. There are encouraging signs for its German operations, with sales up 5% helped by a 3.6% increase in average room rates. If the pace of growth accelerates, it bodes well for Whitbread’s aim to replicate Premier Inn’s UK success in Germany.”

Netflix, Q3 Results, Thursday 17 October

Matt Britzman, senior equity analyst, Hargreaves Lansdown
“Netflix comes into next week’s third-quarter results on a high. Recent performance has been strong, with subscriber growth smashing expectations back in July. Several key initiatives are working in tandem: the successful rollout of paid sharing, increased traction in non-English speaking markets, and the cheaper ad-supported subscription tier.

The key going forward is to keep the subscriber flywheel going. Scale matters in the streaming space, and the larger Netflix gets, the more leverage it has over peers and content creators. Subscriber growth on a yearly basis is expected to slow from 8.7mn to around 5mn in the coming quarter. But that’s largely due to a tough comparable quarter last year, given that it was the first time paid sharing was introduced. Analysts think there’s scope for another positive surprise here, though nothing is guaranteed.”

Among those currently scheduled to release results next week:

 *Events on which HL will be updating investors