All things considered, 2023 has been pretty kind to investors, so far. Whether this will continue into March is another thing entirely. That’s why I’ll be keeping an eye out for how the market responds to a number of FTSE 100 stocks reporting next month.
Persimmon
First on my list of top-tier companies is one I started buying only a few weeks ago. Housebuilder Persimmon (LSE: PSN) is down to report full-year results for 2022 on 1 March.
Of course, the terrible end to last year for the property sector isn’t exactly a secret. With galloping interest rate rises, the number of completions and reservations was always going to fall. Unsurprisingly, Persimmon’s share price followed a similar trajectory.
Last year’s numbers are, frankly, not the main event for me. The thing I’m most interested in is the outlook statement from CEO Dean Finch. Have suggestions that a recession in the UK will be shorter and less severe than originally thought been enough to kickstart demand? Anything remotely better than expected will likely be lapped up by the market.
I’m also interested to see what happens to the dividend. We know a cut is coming.
The question is how much will it be reduced by? Analysts are predicting a reduction from 235p per share to 163p in 2023 (giving a yield of 11.7% at the current share price). Obviously, a bigger drop won’t be well-received by income hunters.
Pearson
Educational firm Pearson (LSE: PSON) reports only a few days after Persimmon. Final results are due on 3 March.
In contrast to the aforementioned housebuilder, investors here enjoyed a stellar 2022. Shares climbed 53%, making this company the second biggest gainer in the index. This performance was only narrowly beaten by defence giant BAE Systems.
Will the party continue? Well, January’s trading update beat analyst expectations with the company reporting 5% in underlying sales growth. I doubt trading has fallen off a cliff since.
Then again, I wouldn’t blame anyone thinking of taking some profit off the table. Consequently, any indication that the purple patch is ending could see Peason’s share price fall. For this reason, I’m not desperate to buy right now.
Regardless, I think Pearson presents as an interesting investment, given its ongoing transition to a subscription-based digital service. The forecast 2.5% dividend yield for FY23 looks secure too.
Next
A third company I’ll be checking in with next month is fashion/lifestyle retail giant Next (LSE: NXT). Its final results come in on 29 March 29.
Recent share price performance suggests investors are far more bullish than they were only a few months ago. Next stock is up 16% in 2023, so far.
That’s not all that surprising. Next raised its pre-tax profit forecast to £860m from £840m back in January. This followed better-than-expected full-price sales in the nine weeks to the end of 2022.
Whether the more cautious outlook for the current year is now revised is open to debate. Next certainly has a tendency to underpromise and overdeliver. Then again, the UK economy isn’t exactly motoring yet.
Regardless, the FTSE 100 stock is something of a bellwether when it comes to judging consumer sentiment. Hence, I’ll be interested to see if there’s a ripple effect on the share prices of other retailers.
