3 FTSE 100 Shares For The Week Ahead: Barclays PLC, BP plc And British American Tobacco Plc

We’ll have interims from Barclays PLC (LON: BARC), BP plc (LON: BP) and British American Tobacco plc (LON: BATS).

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Interim results from our top FTSE 100 companies will be coming thick and fast next week, with representatives from across the sectors bringing us their latest. There will also be a number of smaller company interims released next week as well, but they’re pretty much swamped by the biggies.

Want to hear about banking, oil, tobacco? Here’s one from each for next week:

Barclays, Tuesday

With focus increasingly on the re-privatisation of our bailed-out banks, eyes will be peeled for news from the sector as a whole. The two taxpayer-funded ones will report next week, but we’ll kick off with Barclays (LSE: BARC) (NYSE: BCS.US) on Tuesday. What should we expect?

The current full-year consensus suggests earnings per share (EPS) of 36p from £4.5bn in pre-tax profit, though there is a fair divergence in individual predictions. The same goes for dividends, with a fairly wide range and a consensus of 7.2p per share, which would provide a yield of 2.2% on the current share price of 321p. We’re probably unlikely to get much clue to the full-year payout just yet, with a 1p interim paid for the first quarter and a repeat of that very much expected for half time.

Barclays shares have more than doubled over the past 12 months, but what valuation is left? Well, those forecasts put the shares on a distinctly lower-then-average P/E of 9.2, dropping to under 8 for 2014, so we might still have a long-term bargain here.

BP, Tuesday

Tuesday is also big oil time, with interim results due from BP (LSE: BP). The share price has been creeping up since the start of 2013 — it’s gained 12% since the beginning of January, to 476p today. BP is a constituent of the Fool’s Beginners’ Portfolio, so I’ll be paying close attention myself, but there shouldn’t be any surprises.

BP’s first-quarter results showed the oil & gas giant bouncing back to its longer-term profits trend after last year’s slump — full-year forecasts suggest a 36% recovery in EPS, putting the shares on a P/E of under 9. BP’s dividend has remained strong too, with last year’s payment providing a 5.2% yield. We should see a small payout rise this year, though an appreciating share price puts the forward yield slightly down at 5%.

A drawn-out conclusion to the costs of the Gulf of Mexico disaster provides the only real clouds in the picture, and a final resolution could be what is needed for a share price rerating.

British American Tobacco, Wednesday

On Wednesday, it’s time for first-half figures from British American Tobacco (LSE: BATS) (NYSE: BTI.US), and many investors will be wondering if we’re approaching peak profits from the deadly weed. British American shares have followed a steady five-year climb, but over the past 12 months we’ve seen only a 5% rise to 3,470p while the FTSE is up more than 20%.

Forecasts still look decent, mind, with EPS expected to grow by 7% this year and 8% next — but that’s down from the double-digit rises the firm was enjoying until recently. A first-quarter update released in April did tell of a 5% rise in revenue for the period, but actual cigarette volumes fell by 3.7% with total tobacco volumes down 3.4%.

There’s a full-year dividend yield of 4.2% expected with the shares on a forward P/E of 15, and that doesn’t look unreasonable. But if the tobacco tide really is turning, the days of outperformance for the sector could well be in the past.

Finally, dividends can add nicely to your investment returns — they can be spent or reinvested according to your needs. Whether investing for income or growth, good old cash is always welcome.

And that’s why I recommend the BRAND-NEW Fool report, “The Motley Fool’s Top Income Share For 2013“, in which our top analysts identify a share that they believe will provide handsome dividend income for years to come.

But it will only be available for a limited period, so click here to get your copy today.

> Alan does not own any shares mentioned in this article.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

More on Investing Articles

The flag of the United States of America flying in front of the Capitol building
Investing Articles

Is the party over for the S&P 500 as Trump’s tariffs loom?

Donald Trump's planned tariffs have cast doubts on the future performance of the S&P 500. What should investors do now?

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

Warren Buffett continues to invest in this well-known pizza company

Warren Buffett just bought another 1.1m shares in Domino’s Pizza. Should investors follow him into the well-known fast food company…

Read more »

Investing Articles

A £100 weekly income from a Stocks and Shares ISA? It’s possible!

Mark Hartley details how a combination of good stock picks and patience could transform a Stocks and Shares ISA into…

Read more »

Young black colleagues high-fiving each other at work
US Stock

Why Apple stock could be set to soar with the new Alibaba partnership

Jon Smith explains why a new deal relating to the Chinese market could be good news for Apple stock, not…

Read more »

Mindful young woman breathing out with closed eyes, calming down in stressful situation, working on computer in modern kitchen.
Investing Articles

This FTSE stock tanked 58% last week. But there could be some good news!

Shares in John Wood Group plunged after the FTSE engineering stock released a trading update. But our writer thinks there…

Read more »

Young Asian woman with head in hands at her desk
Investing Articles

£1,000 invested in Tesla shares 2 months ago is now worth…

Tesla shares have soared over the last decade. However, since 17 December 2024, they have lost more than a quarter…

Read more »

US Stock

Could Trump’s tariffs cause a stock market crash?

Jon Smith looks at the recent whipsaw movements in the markets relating to US trade policy and talks through stock…

Read more »

Two white male workmen working on site at an oil rig
Investing Articles

Talk of a strategy reset pushes BP’s share price up 7% on Q4 2024 results day, so should I buy more now?

BP’s share price has risen on promises of a strategy reset, which I think will extend its more pragmatic energy…

Read more »