Must read: HSBC, Next, Shell, International Consolidated Airlines

A shortened four-day trading week nonetheless contains a number of interesting and timely updates across a range of sectors. Each of these stocks have been affected by the current Middle East conflict to varying degrees.

HSBC Q1 – Tuesday 5 May

This will be an interesting update following HSBC Holdings (LSE:HSBA)'s strong full-year performance in 2025, as announced in February.

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For all the surrounding noise at present, there was evidence of growing success for its strategic plan, which is significant but simple. Whereas HSBC had been moving towards becoming a business with a slavish reliance on interest rate movements and levels, the revised and increasing focus on the growth in affluent wealth, especially in Asia, is key to the new offering. The group has been investing heavily in this move, giving HSBC higher and more diversified income streams. Apart from the longer-term potential for the key Chinese market, the group previously identified areas such as India and Vietnam as being some of the fastest growing economies at present, while the building economic connections between Asia and the Middle East, notwithstanding any geopolitical conflicts, are also emerging opportunities for HSBC with its sprawling footprint. 

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Even so, the group’s exposure to Asia could be a temporary fly in the ointment, where a previous $2.1 billion (£1.55 billion) charge for losses related to its Chinese Bank of Communications stake and $1.4 billion of legal provisions contributed to an overall $4.9 billion headwind. Although the commercial real estate situation in Hong Kong and mainland China remains difficult, investors will be keen to see HSBC flex its financial muscles once more given its sheer size. A healthy dividend yield of 4.2% has accompanied a share price increase of 60% over the last year, and further shareholder distributions may not be far away.

Next Q1 – Wednesday 6 May

As one of the best run and most respected stocks within the FTSE100, Next (LSE:NXT) finds itself needing to walk the continuous tightrope of becoming a victim of its own success, with expectations for its results being so high. For example, at the full-year numbers in March, the group announced pre-tax profit which grew by 14.5% to £1.16 billion. The latter contained £8 million of additional profit from upgraded guidance in January (which itself was the fifth upgrade in a year), due to better than expected full-price sales and end of season clearance rates. 

The outlook for the current year continues to build on the group’s success hitherto, with full price sales expected to rise by 4.5% to £5.9 billion, pre-tax profit by the same percentage to £1.21 billion, with a further £500 million earmarked for shareholder returns. In the meantime, the current yield of 2% is boosted to 4.7% including a special (if temporary) dividend.

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The shares have taken a rare breather of late, having declined by 6% so far this year following wider market weakness, as the inflationary impact of higher energy prices threatens to heighten input costs as well as crimp consumer demand. However, this has done little to derail the group’s progress overall, which has seen an 8% increase in the share price over the last year and 91% over the last three years - a considerable achievement given the traditional restraints which retail stocks face. 

Shell Q1 – Thursday 7 May

The recent BP numbers, where the group doubled first-quarter profit, has led to heightened expectations at Shell (LSE:SHEL). In addition, this week the group announced the $22 billion acquisition of Canadian company ARC Resources which it is estimated will add 370,000 barrels of oil per day to Shell’s portfolio, as well as generating double-digit returns and boosting free cash flow from next year.

Investors will be looking for updates on trading, margins, and any production issues resulting from the Middle East conflict. There may also be some change to Shell’s more recently conservative capital expenditure, where it had guided for a range of between $20 billion and $22 billion for this year.

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Much as the oil companies highlight a low price at which it is against their interest to continue to drill, this can also kick in at the other end of the scale when extremely high prices can make it much less profitable – or even uneconomical – to continue to drill for more of the commodity. 

In the meantime, the group will go into the numbers with high expectations and shareholder returns in focus. Overall returns are currently boosted by a dividend yield of 3.3% as well as a multi-billion dollar share buyback programme, where Shell confirmed that the rate which is currently running at $3.5 billion per quarter will continue. Shareholders have also enjoyed a share price rally of 35% over the last 12 months, and of 20% in this year alone so far.

International Consolidated Airlines Q1 – Friday 8 May

The full-year results in February overpowered what had been a difficult third quarter for International Consolidated Airlines Group SA (LSE:IAG), where the government shutdown in the US let alone the ongoing trade wars and the then impending UK Budget did little for the customer propensity to spend. This has now been compounded by the situation in the Middle East, leading the oil price being significantly higher and the share price falling by 12% so far this year.

Across the sector globally, some airlines have chosen to sacrifice a number of shorter haul and less profitable routes, while leaving the higher margin long-haul flights in place. Across its portfolio, IAG has exposure to both and as such, the group’s outlook comments could prove important.

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Apart from updates on the performance of its major brands, which include British Airways, Iberia and Aer Lingus, investors will be seeking the latest news on areas where the group continues to ratchet up revenues from its asset-light businesses, such as Iberia’s third party maintenance, repair and overhaul business, BA Holidays and the IAG Loyalty scheme. In the meantime, investors who chose to buy in to the recovery while the shares were grounded during the pandemic have been handsomely rewarded, with the price having risen by 43% over the last year, and by 109% over the last two years.