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Greencore (full-year results 4 December)
Greencore is expected to report earnings per share of 14.8p per share, down 4% over the year, while revenue is expected to rise 9.3% to £2.54 billion. The firm has beaten on revenues in five of the last eight updates, and beaten earnings forecasts in seven of the last eight. The average move on results day is 6.5%. The shares trade at 11.8 times forward earnings, below the five-year average of 14.5, and comfortably below the sector average of 16.
The firm’s disposal of its US business means the focus will be how the UK division is performing. Investors will be keen to hear what the firm plans to do with the cash from the US sale. The firm had moved into the US in late 2016 in order to boost growth and help move away from a reliance on the UK. Now that the US division is sold, the firm has to provide a decent update on how it will avoid becoming a prisoner of the UK’s difficult economic outlook.
Greencore shares have risen steadily from their nadir in March, but this only marks a retracement from a much wider downtrend over the past two years. Rising trendline support comes into play around 185p. A break below this could suggest that the overall bearishness is reasserting itself.