FTSE 100 and FTSE 250 shares – what to expect on the stock market next week

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

• Will sluggish market conditions chip away at ASML’s order book?
• Can IDS deliver some positive news as pay disputes at Royal Mail near an end?
• How will Vistry deal with rising interest rates?

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FTSE 100, FTSE 250 and selected other stocks scheduled to report next week:

*Events on which we will be updating investors.

ASML – Derren Nathan, Head of Equity Research

Next week’s second-quarter results will reveal if ASML remains on track to hit its full-year target for 25% revenue growth to around €26.5bn. A near doubling of sales in the first quarter and a strong forward order book provide a solid foundation for this target. Markets are forecasting second-quarter sales to land in the middle of ASML’s €6.5bn to €7.0bn guidance. But analysts are anticipating the rate of growth to slow as the year progresses, reflecting sluggish conditions at chip foundries.

However, we think ASML is less sensitive to short-term fluctuations in demand for chips and stands to benefit from longer-term drivers for ever more powerful processors, such as the boom in artificial intelligence. It’s a complex picture and we’ll be focussing on where the order book has moved, which at the last count stood at €39bn. We’re also hoping for more clarity on the effect of tightening export controls on China.

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IDS – Matt Britzman, Equity Analyst

It’s been difficult to find too much to get excited about at IDS recently, as the owner of Royal Mail has felt the hefty impact of Union battles over the past year or so. There’s light at the end of the tunnel, as Royal Mail and the Union (CWU) agreed on a pay deal earlier in the year – but there’s still the hurdle of a vote from members to overcome.

Next week’s trading update will likely point to further challenges ahead. As IDS looks for a new CEO at Royal Mail, the wider group is hoping to return underlying operating profit to positive territory this financial year. The consensus among analysts is that it’s achievable, currently forecasting £66m of EBIT for the year, with around £300m of losses at Royal Mail being offset by profit at GLS, the international logistics business.

Real estate disposals are on the cards to help offset cash outflows from Royal Mail, while the trading environment remains tricky with volumes trending lower in both businesses. Fixing the relationship with workers is one thing, bringing growth back to the underlying operation is another – there’s a lot to do.

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Vistry – Aarin Chiekrie, Equity Analyst

Back in May, we got a positive update from Vistry covering year-to-date performance. Things were largely heading in the right direction, with sales rates improving and the forward order book ticking higher. The positive momentum led the group to nudge up its full-year pre-tax profit guidance from more than £440m to above £450m.

While we don’t expect next week’s trading update to bring with it any big surprises, there has been a key change. The Bank of England recently hiked interest rates by half a percentage point to 5.0%, as inflation’s proving stickier than previously thought. And with interest rates now expected to remain higher for longer, challenges look set to mount for buyers.

As a result, we anticipate the continued use of incentives, particularly aimed at first-time buyers, which will likely squeeze Vistry’s margins over the rest of the year. We’re keen to see how the group plans to deal with these challenges and to get an update on the net cash position, which was looking slim compared to peers at the last count.

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Estimates are not a reliable indicator of future performance. Past performance is not a guide to the future. Investments rise and fall in value so investors could make a loss.

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