The week ahead: Pearson, Persimmon, Whitbread
11th January 2019 16:33
by Lee Wild from interactive investor
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The pace of corporate announcements increased last week, but fewer of the big names are pencilled in for the next few days. Lee Wild runs through the results to watch.
Monday 14 January
Trading Statements
Revolution Bars, JD Sports Fashion, PageGroup, Kromek
Tuesday 15 January
Trading Statements
Games Workshop, Big Yellow Group, Hays, The Gym Group, Provident Financial, Ashmore Group, Persimmon, Genel Energy
AGM/EGM
Manchester & London Investment Trust
Wednesday 16 January
There was a time when everything Pearson (PSON) touched turned to dust. Selling the Financial Times and a stake in The Economist seemed absurd, and a series of profits warnings appeared to suggest focusing solely on a vulnerable US education sector was unwise.
However, if you hadn't glanced at Pearson's share price for the past 16 months you might be shocked to see how well they've done. In fact, they were the fifth best-performing FTSE 100 index stock in 2018, up 27% over the 12 months.
The recovery began when chief executive John Fallon announced he was slashing both jobs and the dividend, while Pearson focused on growing its digital learning tools and services business.
This annual trading update, which covers the busiest time of the year, will be important both to drive further upside and justify what's already been achieved. A forward price/earnings (PE) ratio of 17.8 is not cheap.
Source: TradingView (*) Past performance is not a guide to future performance
Back in October, Fallon admitted there was a lot still to do, but that Pearson was on track to "return to underlying profit growth and, with a strong balance sheet, are set up well for the future".
Analysts at Deutsche Bank believe the optimism around Pearson stock right now is overdone.
"Some bulls have recently been positing operating profit for 2019 in excess of £645 million (Vuma consensus median £601 million)," writes analyst Chris Collett. "A figure at this level is possible, but it would require Pearson to deliver operating profit at the top end of the 2018 guidance range as a base."
Deutsche predicts profit nearer £616 million in 2019.
Trading Statements
Van Elle Holdings, 1pm, Tullow Oil, Headlam Group, Dunelm, Diploma, Pearson
Thursday 17 January
Trading statements
Workspace Group, Whitbread, SSP Group, Rio Tinto, DP Eurasia, Associated British Foods, Ilika, Ten Entertainment, N Brown
Friday 18 January
Trading statements
Henry Boot
AGM/EGM
Management Resource Solutions, Kazera Global, Ironveld
*Horizontal lines on charts represent levels of previous technical support and resistance. Trendlines are marked in red.
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