Earnings look ahead – Ocado, Tullow Oil, GlaxoSmithKline

A look at company earnings next week.

Ocado
Source: Bloomberg

Ocado (full-year earnings 6 February)

The recent announcement of a deal to use Ocado technology for a major Canadian supermarket sent the shares flying. The firm looks to be successfully reinventing itself as a provider of world-class technology for online shopping, and arguably the potential is huge. The deal was the second within a few months, after it said it would build a warehouse in France for Groupe Casino. Ocado is expected to report a 11.6% rise in earnings, to 1.1p per share, while revenue is expected to be 14% higher at £1.45 billion.

The parabolic move in Ocado’s shares, driven by frantic short-covering, has petered out near £5.50. However, it continues to hold above the previous high of 478p, set back in the summer of 2015. If this continues to provide a base, then longs may be able to reap the rewards of further gains. The 2014 high at £6.23 is the next big level to watch.

Tullow Oil (full-year earnings 7 February)

Tullow is forecast to see a 90% rise in earnings for the year, but will still make a loss of 5.1 cents per share. Meanwhile, revenue is expected to be 28% higher at $1.7 billion. A recent trading statement indicated that cash flows were on the rise again, helped by the relentless surge in oil prices. Full-year production also rose to 94,700 barrels a day, from over 70,000 in 2016. Thus the firm’s position is becoming more secure, with debt being steadily reduced to $3.5 billion, down $1.3 billion. At 13.7 times forward forecast earnings, it is well below its two-year average of 26.5 times, while half the analysts covering the firm have upgraded their price targets in the past month.

Since July, the share price has seen a steady progression of higher highs and higher lows, so if the shares, now currently oversold on a daily chart, can create a new higher low above the November nadir at 160p then the uptrend is intact. A recovery would target 216p, and then run into the short-term descending trendline from the January highs, with the 2018 peak at 236p above this.

GlaxoSmithKline (full-year earnings 7 February)

GlaxoSmithKline (GSK) is expected to see a 1% fall in headline earnings, to 25.9p per share, while excluding exceptionals the figure is expected to surge 118% to 11.6p per share. Sterling’s recent appreciation against the US dollar (USD) has hurt performance, as highlighted in the recent trading statement. While the current price-to-earnings (PE) ratio is a rather high 27, this falls to a modest 11.8 for the forward PE. In addition, this latter figure is below the two-year average of 14.7. It should also be noted that the shares currently trade at a 47% discount to its peers, versus an average discount of 32% over the past two years, suggesting that the shares may enjoy relative outperformance versus a basket of its peers.

GSK shares currently hover above the £12.96 support level, with £12.70 below this as a possible further line of support. A bounce would need to move above the recent highs at £13.80, and ideally move above £14.00 to break the steep downtrend in place from the 2017 highs above £17.00.

Denne informasjonen er utarbeidet av IG, forretningsnavnet til IG Markets Limited. I tillegg til disclaimeren nedenfor, inneholder ikke denne siden oversikt over kurser, eller tilbud om, eller oppfordring til, en transaksjon i noe finansielt instrument. IG påtar seg intet ansvar for handlinger basert på disse kommentarene og for eventuelle konsekvenser som et resultat av dette. Ingen garanti gis for nøyaktigheten eller fullstendigheten av denne informasjonen. Personer som handler ut i fra denne informasjonen gjør det på egen risiko. Forskning gitt her tar ikke hensyn til spesifikke investeringsmål, finansiell situasjon og behov som angår den enkelte person som mottar dette. Denne informasjonen er ikke utarbeidet i samsvar med regelverket for investeringsanalyser, så derfor er denne informasjonen ansett å være markedsføringsmateriale. Selv om vi ikke er hindret i å handle i forkant av våre anbefalinger, ønsker vi ikke å dra nytte av dem før de blir levert til våre kunder. Se fullstendig disclaimer og kvartalsvis oppsummering.

Find articles by analysts

Finn artikler av analytikere

CFDer er komplekse instrumenter som innebærer stor risiko for raske tap på grunn av giring. 79 % av alle ikke-profesjonelle kunder taper penger på CFDer hos denne leverandøren.
Du burde tenke etter om du forstår hvordan CFDer fungerer og om du har råd til den høye risikoen for å tape penger.
CFDer er komplekse instrumenter som innebærer stor risiko for raske tap på grunn av giring.