Upcoming Week (27-31 Jan): SMWH, CCC – Keelan Cooper from Stockopedia
The past week has been eventful, with various impactful occurrences keeping a wide range of individuals engaged and attentive. Following Donald Trump’s second inauguration, financial markets have continued their positive trajectory, witnessing new highs in the S&P 500 and the FTSE 100. These milestones indicate sustained optimism and a promising economic outlook, bolstered by corporate earnings reports and anticipated policies supporting lower interest rates.
The FTSE 250, often considered a more accurate indicator of local company health, is poised for potential growth in the near future. Company updates during the week caught the attention of many, including the disappointing trading update from easyJet. Despite easyJet’s Q1 forecast alluding to lower unit revenue in Q2, the company remains on course to achieve its medium-term profit target and maintains expectations of around £709m in pre-tax profit. Interestingly, easyJet’s current market capitalization translates to a forward P/E ratio of less than 5.5, prompting divergent reactions from brokers, with UBS slightly adjusting its target price and Bernstein lowering theirs.
Investor reaction to easyJet’s cautious stance on share repurchases, relative to the proactivity of British Airways owner IAG in this realm, emphasizes the market’s preference for IAG. As Ryanair’s earnings report looms on the horizon, all eyes are on Michael O’Leary’s impact on the budget airline sector. Apple’s divergence from Warren Buffett’s other “Magnificent 7” stocks has brought attention to Buffett’s strategic timing once again, highlighting Apple’s unique performance in the market.
While WH Smith (LON:SMWH) has expansion plans in airport locations, the realization of these plans may be a protracted process. Despite the modest number of airport shops relative to its size, the impact on the company is notable, emphasizing the influence of strategic decisions on overall performance.
The coming week holds the promise of continued volatility in the financial and corporate spheres, with significant events and developments likely to captivate investors, political observers, and the public. As the economic landscape evolves and companies navigate various challenges and opportunities, close attention to market trends and strategic decisions will undoubtedly remain critical for informed decision-making and successful outcomes.
