Earnings season continues this week with several results that could impact your portfolio. Indeed, four large ‘big consumer’ companies in America and Europe will reveal their figures in the coming days. Which stocks should you watch? And what can you expect?
The struggling supply chain
Food, drinks, personal care products or household goods… Companies that make these products have a unique advantage in the market: they are naturally diversified. They provide basic or essential products, which means they often continue to perform well even during a crisis. We all still need to eat! These multinationals stood out during the Covid-19 crisis.
But it’s not all good news. The growing inflation rate is a problem for these companies (+2.4% in August and +2.7% in September). For several months now, the prices of certain raw materials like aluminium, wood and cotton have soared, as well as certain food items. Inflation is now weighing on the supply chain, raising the cost of manufacturing and, in turn, sales prices. Aside from prices, some American economists have pointed to a drop in the quality of consumer products in the food and clothing industry.
Keep all this information in mind when the consumer goods companies report their earnings this week.
Which stocks to watch?
Procter & Gamble will kick things off on Tuesday, October 19th. The US company specialises in hygiene and beauty products, and its shares have returned 81% over the past five years. As for this quarter, the company expects revenue to grow 3.74% to $78.97 billion. Earnings-per-share is expected to grow 4.95% to $5.94.
On Thursday 21st October, it’s time for Unilever to reveal its figures. The company is home to brands like Ben & Jerry’s, Dove and Lipton. Sales growth is forecast to hit 5.4%, with much of that coming from China, where they’ve seen a 50% increase in online sales. The Indian market is also booming.
On top of that, Unilever is popular with investors who like dividends. Indeed, Unilever’s dividend yield is expected to be between 3.84% and 4%.
French companies in the spotlight
On Thursday October 21st, French companies L’Oréal and Pernod Ricard will report their figures. Both are expected to post encouraging results. L’Oreal is expected to benefit from a cash flow increase of 67.7% while Pernod Ricard stands out with a rate of return at 56%.
Both of these results could have a ripple effect on the French CAC 40 index. Therefore, keep your eye on the ETF that replicates this index: France 40 Index ETF (Lyxor), which is available on the BUX Zero app.
Make the most of this new earnings season!
The results of Pernod Ricard, Unilever or even Procter & Gamble won’t just impact their own shares. They can have an effect on the whole sector. Lots of opportunities can arise if you know how to look for them during this time. Good news: we put together an article with three simple steps to make the most of earnings season. Take a look.
Economic and earnings calendar
Tuesday – Trade balance in Spain (August). Quarterly figures from United Airlines, Halliburton, Kinder Morgan, Procter & Gamble, Philip Morris, Johnson & Johnson and Netflix (read our analysis on Netflix here).
Wednesday – Inflation rate in the euro area (August and September). Weekly oil stocks in the United States. Unemployment rate in the Netherlands (September). Quarterly figures from Baker Hughes, Tesla, ASML.
Thursday – Unemployment rate in the United States. Flash index of consumer confidence in the eurozone (October). Quarterly figures from AT&T, Intel, Whirlpool, Quest Diagnostics, Snap, Mattel, L’Oréal, Pernod Ricard, Unilever.
We’ll be back next week with another edition of the BUX Breakdown. In the meantime, have a good week on the markets!
The BUX Breakdown was written by Clémentine Pougnet.
All views, opinions, and analyses in this article should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice. 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.