{"id":87833,"title":"Share Talk Expected Market Updates For The Week Ahead – 27th September 2021","publisher":"Share Talk","author":"sharetalk","published":"2021-09-26T08:56:37+00:00","modified":"2021-09-26T08:56:37+00:00","canonical_url":"https://www.share-talk.com/share-talk-expected-market-updates-for-the-week-ahead-27th-september-2021/","markdown_url":"https://www.share-talk.com/share-talk-expected-market-updates-for-the-week-ahead-27th-september-2021.md","json_url":"https://www.share-talk.com/share-talk-expected-market-updates-for-the-week-ahead-27th-september-2021.json","category":"Blogs","categories":["Blogs","Investment Reports","Property & Retail"],"tags":["airports","beers","Boohoo","Carling","Coors","Credit Suisse","Deutsche Bank","FTSE 250","Moonpig Group","Next","Pennon Group PLC","railway","SSP Group","Stations","Travel","United Utilities","Wetherspoons"],"featured_image":"https://i0.wp.com/www.share-talk.com/wp-content/uploads/2023/11/Stencil-Google-Chrome-2023-04-19-at-2.47.43-PM.jpeg?fit=1231%2C615&ssl=1","format":"news","language":"en-GB","content":"This week’s market sectors and industries under review include Pennon and United Utilities, catering to water suppliers and fashion lovers.\n\nOther big names include Go-Ahead transport group, SSP sandwiches-on-the-go and Wetherspoons boozer.\n\nWe move into October at week’s end, and the new calendar page brings you the usual glut of macroeconomic data.\n\nInvestors should be aware of important political events, such as the German election on Sunday and the possible US funding deadline. Additionally, Boris Johnson’s government has a number of issues that it must fix, including the wobbling energy market, and shortage of lorry drivers.\n\n“Meanwhile, from central banks, we’ve got an array of speakers, Fed Chair Powell and ECB president Lagarde so it’ll be fascinating to hear their opinions as a lot of central banks have recently tilted towards a more hawkish orientation given inflationary pressures,” stated analysts at **Deutsche Bank ( NYSE :DB).**\n\nRaw data: US durable goods Monday, US consumer confidence Tuesday, UK and US housing figures Wednesday. A busy Thursday saw the release of official Chinese PMIs, UK GDP and EU unemployment and inflation numbers (key for US Federal Reserve). Friday’s first day of the new lunar month will bring manufacturing PMI data from China, Europe and the US.\n\nAnalysts at ING look at Friday’s US PCE deflator. They say that despite the reduction of unemployment benefits and the end of stimulus checks, they still expect incomes growth. Because the economy is growing, this is because there are rising wages and employment gains.\n\n“This is an important story that should boost consumer spending after the Covid revival speedbump that the economy seems to have experienced in 3Q 2022. Our forecast predicts that inflation will continue to rise with upside risks more likely than downside.\n\nPortfolio rebalancing flows are expected to occur as this week’s last week of the month. Portfolio managers will sell stocks markets that have performed well and buy those that have not, in order to maintain their asset allocation.\n\nAnalyst Marshall Gittler from BDSwiss says this could lead to the purchase of the Australian dollar and Japanese yen.\n\nThis week’s agenda includes a different type of UK utility, although the electric and gas firms will undoubtedly remain prominent for some time amid the ‘energy crisis’ and consumer turmoil.\n\n**United Utilities Plc** will kick off the week. The focus of the week will be very simple and almost singular, especially since other income-investing stalwarts within the sector are clearly being stricken by volatility.\n\nIn a note, Hargreaves Lansdown analyst Laura Hoy stated that investors will be focused on one thing when United Utilities provides a trading update. It is the dividend. People hold utilities because they have more reliable income streams that can translate into better dividends. A potential yield of 4.3% is an important part of United’s investment case. ”\n\n“But, remember that no dividend is guaranteed. This is particularly true right now, as United has had some bumps in recent months. Although regulatory changes led to lower charges, which hurt revenues last year; Ofwat’s recent decision allowing utilities to raise their prices could reverse some damage.\n\n“We expect management to provide an update on how the change may impact the group’s forecast for this fiscal year.”\n\nHoy also said that better-than-expected revenues were possible, which would be a “welcome tailwind”. She added that bolstered profits could trigger a higher than expected dividend hike in the future.\n\nOther places, at **Pennon Group PLC** which reports Tuesday – some City residents think the share has become too expensive, and that expectations are high.\n\nLast month, Credit Suisse London-based analysts questioned whether it was time for Pennon shares to be sold as the company switched its rating to underperform.\n\n**Credit Suisse ( NYSE.CS. )** essentially said the stock was ‘overbought’. It also pointed out that the stock trades at a 43% premium relative to the regulated assets base (RAB), which it claimed is “at extremes for the industry”. The analysts at Swiss Bank note that the dividend yield was at “historic lows” (3%).\n\nInvestors in** Moonpig Group (MOON.L)** will be hopeful that the online greetings card specialist will have a better message for Tuesday’s update, after a disappointing summer outlook.\n\nIn July, a London market newcomer predicted lower revenue for the current fiscal year at £250-260mln than the £368mln previous time due to pre-pandemic consumer habits returning.\n\nAlthough the financial year ended “moderately ahead” of expectations, customer purchases were expected to slow down and stall at 5% above pre-pandemic levels.\n\nThe online gift and card shop stated that it will continue to grow its business because it is buoyed in part by customer retention levels over the past year, which are consistent with historical patterns.\n\nAccording to Hargreaves Lansdown analyst Susannah Streeter, retaining customers who have moved on from home is likely to prove costly.\n\nStreeter said that the company has now acquired vast data on customer preferences and choices, along with flexible delivery options. This “should help” it “stay ahead of the herd”, but future profits will likely be used to try to grab a larger share of the UK and Netherlands card market.\n\n**Next plc** will make a mid-week trading announcement. Investors will be looking for assurance on their dividend payments.\n\nNext also announced that it will return £240mln to shareholders in excess cash.\n\nIt paid £140mln to the beneficiary on September 3, and promised to pay the remainder, which would amount to £100mln following the December trading update in January 2022. This assumes that everything went according to plan.\n\nThe FTSE 100 retail powerhouse noted that it would look to resume normal dividend payments in the year up to January 2023. Shareholders and analysts may also be interested in the resumption or buybacks.\n\nAnalysts and shareholders will also be interested in Lord Wolfson’s views on pressing strategic or macroeconomic issues. These include the value of High Street shops, the continued addition of third-party brand names to the website, and issues around input costs, availability of raw materials, freight capacity, and pricing.\n\nAnalysts at AJ Bell stated that Next’s pricing views should be especially informative, considering how the firm benchmarks itself against full-price sales.\n\nWednesday’s year-end numbers for **SSP Group plc ( SSE.L),** were released by the travel industry, which has been flying to brighter skies since the Biden administration reopened US flights.\n\nSSP, which runs food concessions at 180 airports and railway stations, was one of those lifted by the news. It said that it would reopen units when it can make a positive contribution towards underlying profits.\n\nThe company reported a 73% decrease in sales for the quarter prior to 2019, with global flights falling 41% and UK rail passenger numbers dropping 57%.\n\nManagement predicted that sales would drop 60% in the fourth quarter, with 1,150 units of 2,750 units being open at the end May and 1,200-1,500 opening in the 4Q.\n\nPeel Hunt analysts stated that this should be possible given the fact that global flight numbers are down 32% and UK rail passengers numbers are down 43%.\n\n“We believe that having half of the estate open would result in total revenues falling 60%.\n\nGiven the trend in business travel and risk of Covid variants to international travel they do not anticipate 2022 being upgraded at this point. However, Peel analysts predict that SSP will “should benefit from enhanced expansion possibilities and the long-term preservation of recent cost savings”.\n\n**Boohoo Plc** will release its interims on Thursday, but the figures are still overshadowed in part by ongoing supply chain reviews. Market participants will be eager to hear more about how that is going.\n\nHowever, numbers are still very important and investors expect a lot of the AIM-listed fast-fashion retailer.\n\nThe clothing retailer says that “good” is not enough. Analysts at Hargreaves Lansdown said that the group must remain focused on its medium-term goal to grow revenue by 25%.\n\n“On a larger scale, we wonder whether boohoo plans to improve its sustainability credentials. ASOS and Primark, two fast fashion brands, recently pledged to increase their sustainable material use. We would appreciate any comments or goals regarding this and how it affects margins.\n\n**Go-Ahead Group plc’**s annual results were due Thursday. However, they were delayed due to discussions with the government regarding the final details of its Southeastern rail franchise.\n\nUp until last week, the theme of recovery from Covid was “Recovery from Covid”. The group reported that bus passengers had increased by 65-70% to pre-covid levels in June. However, Southeastern and GTR now operate on a fee basis for rail services due to the closing of franchises.\n\nHowever, the merger of National Express and Stagecoach has raised the possibility of other combinations.\n\nGo-Ahead, NEX, Stagecoach and Stagecoach are all major bus/rail operators. Analysts are now asking if there are enough to go around as a group because the government sets the price but the focus is on cutting costs.\n\nPeel Hunt projects underlying profits of £69mln, and sales of £3.68bn in the year ending June 2021. However, political sensitivity means that Peel Hunt is unable to predict a return of dividends.\n\n**JD Wetherspoon (JDW.L) Plc**‘s results for July 2008 should provide an update on the Covid recovery theme.\n\nThe consensus is for a turnover of approximately PS799mln in the year to 2021 and a loss of around £129mln. However, the market will focus on comments from the FTSE 250 group about the pace of recovery.\n\nRival pub chains report sales back to 90% levels before the pandemic and analysts say that ‘Spoons should also have seen steady customer returns.\n\nWe will be watching closely what Tim Martin, chairman of the UK’s shortage crisis, has to say.\n\n**Wetherspoons** was in the news recently when its pubs ran out of Carling and Coors beers because of a shortage of UK lorry drivers and industrial action at its supplier.\n\nAccording to brokers, staff shortages and rising energy, purchasing and distribution costs will be the most pressing issues facing the group. This could lead to its low prices being raised.\n\n**Market announcements expected for the week ending 1 October:**\n\nMonday 27 September:\n\nTrading announcements: United Utilities plc\n\nEconomic data: US durable goods\n\nTuesday 28 September:\n\nFinals: Close Brothers plc, Ferguson PLC (LSE:FERG), Smiths Group (LSE:SMIN) plc\n\nInterims: AG Barr (LSE:BAG) plc, Mortgage Advice Bureau plc, Next 15 plc, S&U PLC (LSE:SUS, FRA:97V)\n\nTrading announcements: Moonpig plc, Pennon Group PLC (LSE:PNN, OTC:PEGRY)\n\nEconomic data: UK 30-year treasury gilt auction, US trade, US consumer confidence\n\nWednesday 29 September:\n\nInterims: Next plc\n\nTrading announcements: SSP PLC\n\nEconomic data: UK mortgage lending/approvals\n\nThursday 30 September:\n\nFinals: Go-Ahead Group PLC, Renishaw PLC (LSE:RSW)\n\nInterims: boohoo Group plc, OptiBiotix Health PLC (AIM:OPTI, FRA:OB3)\n\nFTSE 100 ex-dividends to knock 5.55 points off the index: British American Tobacco PLC (LSE:BATS), Smith & Nephew PLC (LSE:SN), Rightmove PLC (LSE:RMV), Barratt Developments plc\n\nEconomic data: UK GDP growth rate, Nationwide housing prices, car production, US jobless claims\n\nFriday 1 October:\n\nFinals: J D Wetherspoon plc\n\nEconomic data: UK manufacturing PMI, US personal income/spending"}