Next week’s stock market outlook for FTSE 100 and FTSE 250 stocks

What to expect from a selection of the FTSE 100, FTSE 250 and other selected companies releasing next week:

  • Barratt Developments will look to build on last year’s performance
  • Nestle seeks to maintain control of volumes because this drives up prices
  • As strikes hit competitors, have auto sector margins hit record lows? You’re here?

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Among those whose results are currently scheduled to be published next week:

*Events we will inform investors about

Barratt Developments – Aarin Chiekrie, Equity Analyst

Next week’s trading report will give us a first look at Barratt Developments’ performance in the first quarter. We expect sales rates to decline by double digits year-over-year as prices remain relatively robust. Construction cost inflation is also expected to decline from 9-10% to around 5% this year, and we’re eager to see if that has already started to materialize. Any early progress in this area would bring welcome relief to the margins.

For the full year, Barratt expects completions to be in the range of 13,250 to 14,250, with a slight weighting towards the second half. This implies a decline of around 17-23% compared to last year, highlighting the fact that buyers are less willing to access real estate in the current environment of high mortgage rates. But a colossal net cash position of £1.1 billion at last count gives Barratt a large margin of safety against a short-term market downturn.

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Nestlé – Matt Britzman, equity analyst

Price versus volumes is the game Nestlé is currently playing as it attempts to combat rising input costs. To its credit, the strong brand lineup and exposure to resilient markets like pet care, healthcare and coffee have served it well. Consensus expects organic growth of 8.1% over the first 9 months in next week’s third quarter results, with higher prices offsetting a slight decline in volumes.

Management remains committed to the idea that price increases have a trickle-down effect, with higher volumes and better-margin products being the way to drive shareholder value – we tend to agree.

Comments on the outlook for the remainder of the year will be key. We expect volume comparisons to become easier starting in the fourth quarter, and we expect some benefits to translate into increased ad spend and product mix rationalization towards the end of the year , although there are of course no guarantees.

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Tesla – Matt Britzman, equity analyst

As strikes rage among its main competitors, Tesla has managed to stay out of the immediate line of fire. So far, he has managed to avoid unionization. Largely thanks to the stock options its workers have access to, which have proven more lucrative than the potential base pay increase negotiated by the union. That’s not to say there won’t be any impact, Tesla workers may start to question the potential for equity upside from here and there will undoubtedly be additional wage pressure for the entire sector.

Returning to the day-to-day, third-quarter margins will be closely examined in next week’s earnings release. Some have suggested that weak margins in the second quarter could mark a low point. But recent delivery absences, along with ongoing price actions to help fuel demand, leave many question marks over where margins will stabilize.

We’ll keep our eyes peeled for more information on demand and availability of the new Model 3, as well as an update on the potential for Cybertruck deliveries in the fourth quarter. These two elements could play a favorable role towards the end of the year.

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Estimates are not a reliable indicator of future performance. Past performance is no guarantee of the future. The value of investments rises and falls, so investors could suffer a loss.

This article does not constitute advice or a recommendation to buy, sell or hold any investment. No opinion is given on the current or future value or price of any investment, and investors should form their own opinion on any proposed investment. 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. Non-independent research is not subject to FCA rules prohibiting pre-research dealings, but HL has controls in place (including dealing restrictions, physical and informational barriers) to manage conflicts of interest. potential interests presented by such transactions. Please see our full disclosure of non-independent research for more information.

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