FTSE 100 and FTSE 250 Stocks: What to Expect in the Stock Market Next Week

Among those currently scheduled to release results next week:

  • We should find out if the Barclays mis-selling scandal has resulted in additional costs.
  • Chinese supply disruption could take some shine off Apple’s outlook statement
  • Forward sales at Taylor Wimpey will be a key indicator of how much buyers have left in the tank

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Among those currently scheduled to release results next week:

*Events about which we will be updating investors.

Barclays – Sophie Lund-Yates, Equity Analyst

Barclays has been rocked by an admission that it improperly sold US securities in 2019, which will see the group lose around £450m. An independent review is underway and regulators are asking questions. We will keep an eye out for any information on this next week and hope that the original bill has not increased.

Far from the public misconception, we expect to hear that Barclay’s diversified revenue stream model has kept it in good standing. Its trading arm should have benefited from recent market volatility, while rising interest rates should be good news for the traditional banking business. However, we wonder what the credit balances are like. Last we heard, consumers were starting to spend on credit at a higher rate as the world recovered from lockdowns. With inflation on the rise, more people are turning to loans to help pay bills, but this could lead to a rise in bad debt if inflation isn’t transitory. For that reason, the outlook statement will be read with interest.

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Apple – Sophie Lund-Yates, Equity Analyst

The biggest news as far as Apple is concerned is the Chinese supply chain disruption. We expect some negative commentary on this, but ultimately we don’t think the long-term investment case has been derailed.

Right now, quarterly revenue is expected to increase about 5%. That’s lower than some would like and we think the drag is likely to continue into the third quarter, with the market likely to respond negatively to a worse-than-expected outlook. While that’s disappointing, we know that Apple handled the lockdown disruption early in 2020, and its sheer scale should come in handy once again, but of course nothing is guaranteed.

More important to the big picture is how well the new models have been received and how quickly the lucrative Services division is expanding. This is especially pertinent in today’s high-inflation world, as discretionary spending takes a hit.

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Taylor Wimpey – Matt Britzman, Equity Analyst

The press in recent weeks has focused on issues related to the cladding, as the government seeks to secure plans for developers to cover repair costs. In early April, we heard that Taylor Wimpey pledged to repair all affected apartment buildings over 35 feet.

The group had already set aside £165m for improvements to buildings built in the last 20 years, this commitment extends to 30 years with an expected additional cost in the region of £80m. That will factor into cash flow for the year and we look forward to hearing updated guidance on year-end net cash, which was previously expected to be around £600m.

There are two key pieces of information to keep in mind. The first is forward sales, the last we heard is that the group sold 47% forward in private completions for 2022. Any update will be a telling indication of how much buyers have left in the tank in the wake of higher prices. high housing costs, cost-of-living crises and rising interest rates. The second will be on construction cost inflation, seen at 6% in March, it will be interesting to hear how this is evolving given that progress towards 21-22% operating margins is key.

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Unless otherwise noted, estimates are a consensus of analyst forecasts provided by Refinitiv. These estimates are not a reliable indicator of future performance. Past performance is not a guide to the future. Investments go up and down in value so investors can take losses.

This article is not advice or a recommendation to buy, sell or hold any investment. No opinion is offered as to the present or future value or price of any investment, and investors should form their own opinion on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting pre-investigation trading; however, HL has established controls (including trading restrictions, physical and information barriers) to manage potential conflicts of interest in such transactions. See our full non-independent research disclosure for more information.

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