Source: Sharecast
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said Babcock heads into full-year results on Monday with good momentum.
"A short trading update last month revealed that full-year revenue is expected to rise around 10% to £5.3bn, ignoring exchange rates, driven by strong performances in its Nuclear and Aviation divisions," he noted. "Underlying operating profits are expected to grow at a faster pace of around 19% to £433mn, as margins continue to improve. However, this excludes £140mn in one-off costs related to late-stage design changes on its Type-31 shipbuilding program.
"Looking ahead, Babcock expects to grow revenues at a mid-single-digit rate next year, with around 70% of its workload already under contract. Underlying operating margins also look set to continue improving towards its mid-term target of 9%, underpinned by a strong demand outlook for its higher-margin nuclear business."
On Tuesday, investors will eye full-year results from Telecom Plus and Gear4Music and a pre-close trading statement from Bunzl.
In the US, quarterly results from Carnival Corp and FedEx will be released.
AJ Bell analysts Russ Mould and Danni Hewson said that quarterly numbers from FedEx - often seen as a good indicator of the health of the wider economy thanks to the breadth of its exposure across areas like transport, logistics and e-commerce - will be watched closely beyond the ranks of its own shareholders.
"The share price is in healthy shape heading into fourth-quarter earnings, trading close to all-time highs," they said. "The fact this has been achieved against a complicated backdrop demonstrates the strength has been driven as much by internal changes as external catalysts. The most eye-catching of these saw FedEx complete the demerger of its freight business last month."
They said the focus is likely to be on the company’s ability to continue delivering efficiencies in the business and whether its efforts have been sufficient to absorb increasing wage costs.
"The outlook will also be under heavy scrutiny both for what it says about FedEx’s own prospects but also what it reveals about the macroeconomic outlook, as the global economy continues to absorb the impacts of the Iran conflict," said Hewson and Mould.
On Wednesday, housebuilder Berkeley Group and kitchenware retailer ProCook will release full-year results. Across the pond, quarterly results from Micron and Paychex will be out.
Thursday will see the release of full-year numbers from Moonpig, Halfords and Wise and a pre-close trading update from Serco.
In the US, quarterly results from Darden Restaurants and McCormick & Co will be out.
On the macroeconomic front, the flash UK S&P Global PMI for June on Tuesday and first-quarter US GDP and US personal spending figures for May on Thursday are among the highlights.