City Insider
Banks and builders bonanza
City Insider Archive
- Banks and builders bonanza 17 Feb 2012
- Results season heats up 06 Feb 2012
- Big corporate beasts to chew over 30 Jan 2012
- Week ahead: fancy a brewer? 23 Jan 2012
- The week ahead – retail cheer expected 16 Jan 2012
- Week ahead: Retailers in focus ahead of Christmas 12 Dec 2011
- Week Ahead: Diploma, Compass, central bank minutes 21 Nov 2011
- Week Ahead: Ocado, Telit, Debenhams, MPC minutes 19 Sep 2011
- Insider Report: Fashion Chain Next and DIY Retailer Kingfisher 12 Sep 2011
- The Analysts' View: US Job Data, FTSE100, Greek Debt, Japan 05 Sep 2011
This week we look forward to big news on the markets for construction firms and the state-owned banks.
Thursday and Friday see results from Royal Bank of Scotland (RBS) and Lloyds Banking Group (LLOY) respectively. Better results are predicted for RBS, with restructuring seemingly going well and its Direct Line insurance arm gearing up to be floated in London later this year. The group's return to profit is said to be on track although there won't be a dividend until the next full year. Lloyds' forecasts indicate that the bank will remain lossmaking until its next set of results.
Tuesday sees construction and regeneration group Morgan Sindall (MGNS) lift the lid on its final results, although after a detailed trading statement in December there aren't expected to be any major surprises and the outlook is predicted to remain mixed.
On Wednesday there will be interims from housebuilders Barratt Developments (BDEV) and Galliford Try (GFRD).
Barratt, whose shares are already up over 30 per cent in 2012. Analysts Rachael Waring and Mark Hughes at broker Panmure Gordon believe there will be a “robust” update of trading as part of these results and the pair reckon there is potential for further rises in the shares, targeting a price of 158p. Chris Millington of Numis agrees, saying “Barratt remains too cheap given the prospect for recovering earnings but it does remain the riskiest stock in the sector”.
Galliford, which has been aggressively growing its housing operation through land acquisitions at the bottom of the market, should deliver an interesting update with its results. Millington's colleague at Numis Howard Seymour expects the group will adopt a ‘cash-return’ strategy, which on the back of its strong dividend growth and good yield, “will support further share price improvement from here”.
Residential developer Redrow (RDW), which unveils its numbers on Thursday, did not put out a trading update at its year-end so could surprise a little. Its shares are rated robustly compared with other housebuilding stocks, so any weakness could be punished.
