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Earnings look ahead – Sports Direct, Vodafone, Unilever

A look ahead to earnings next week.

All trading involves risk. Losses can exceed deposits.
Sports Direct
Source: Bloomberg

Sports Direct (full-year results Thursday 20 July)

Sports Direct has been expanding into the US, the latest UK retailer to try breaking into such a key market. Compared to last year, the company may be able to paint a more positive picture, given that in 2016 results were hit hard by Brexit. Still, the outlook for retailers is not particularly encouraging, given the ongoing squeeze in consumer incomes thanks to weak wage growth and higher consumer price index (CPI) growth.

Broadly, the shares have traded in a range of 245p to 328p for the past year, as the firm continues to grapple with its problems. We have seen the shares rally off the June lows, with a break of 310p likely to lead to a test of 328p. A move back to 280p could be a prelude to a move back down towards 245p. 

Sports Direct chart

Vodafone (first quarter trading statement Friday 21 July)

Vodafone seems to have stabilised and stop the declines in European revenues, which have been falling for a number of years. A return to growth here would be a healthy development and could see the shares given fresh upside momentum.

Rallies have been sold in Vodafone for a while now, but if the shares stabilise above the 50-day simple moving average (SMA) at 218p, we could see a new higher low. This could lead to a rest of 224p and potentially on to 226p. A drop below 218p would target 216p. 

Vodafone chart

Unilever (first half results Thursday 20 July)

The six-month cooling off period for Kraft is coming to an end, which could mean that the US firm will make a fresh bid for Unilever. The first half results should be seen in that light, as the firm looks to continue stressing its growth and commitment to slimming down some of its divisions.

The shares found support in late June at £40.86, and a continued bounce could challenge the May/June high around £44. Above £44 the shares are in all-time high territory. It would need a close back below £40.86 to suggest further weakness ahead. 

Unilever chart

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