Royal Mail to post much anticipated update on Wednesday


Wednesday’s results in the UK include Royal Mail, Antofagasta, Close Bros and QinetiQ, while stateside there will be earnings reports from the likes of Coca-Cola, Johnson & Johnson, and Verizon.

Royal Mail PLC (LON:RMG) is probably the pick of the London list, having been the best blue chip performer in share price terms in the first half of this year as the postal group benefited from the online shopping boom and was promoted back into the FTSE 100.

All eyes will be on management’s outlook tomorrow as investors continue to assess how the post carrier will adapt to the reopening of the economy and the likely drop in demand for its parcel delivery services.

READ: Royal Mail: is it as ludicrously cheap as some analysts seem to think?

The company saw profits soar last year thanks to a surge in parcel volumes during the pandemic, but with high street opening their doors again there will be questions about how this momentum can be maintained.

It will interest followers of the company whether demand from online shopping has remained higher than before COVID-19 hit – though a recent recruitment drive suggests they are fairly optimistic.

Another area of interest will be the company’s cost control as it focuses on the more expensive business of delivering parcels over letters.

Back in May, JPMorgan told clients to “just buy it” as Royal Mail shares were “ludicrously cheap” – will investors and analysts still be thinking the same later in the week?

Coke getting fizz back?

Coca-Cola Co (NYSE:KO) numbers later in the day should show the other side of the pandemic coin, as there were lower sales of Coke in bars and restaurants, which put pressure on pricing and therefore profit margins.

“But now that society is opening back up, this trend can be expected to reverse,” says Streeter’s colleague William Ryder, with overall volumes in March returning in line with 2019.

“Despite gaining market share in both shops and bars, Coca-Cola has managed to lose market share overall. This is because the group has an unusually strong position in bars and restaurants, so falling sales there have been enough to shrink Coke’s share of the market.”

Alongside regional sales patterns, investors will hope for updates on Coke’s new brand launches, with its ‘lift and shift’ strategy designed to lift products that prove successful in one market and shift them to others.

(Before then, Netflix will release its numbers later this evening UK time and you can read more on that here).

Significant announcements on Wednesday July 21:

Trading announcements: Royal Mail PLC (LON:RMG), Antofagasta PLC (LON:ANTO), Petra Diamonds Ltd (LON:PDL), Close Bros Group PLC (LON:CBG), Euromoney Institutional Investor PLC (LON:ERM), QinetiQ Group PLC (LON:QQ.)

Interims: Gresham Technologies plc (LON:GHT), RTC Group PLC (LON:RTC)


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