3 FTSE 100 stocks I’ll be watching like a hawk in March

Our writer picks out a trio of FTSE 100 (INDEXFTSE:UKX) stocks that look likely to hit the headlines next month. But will the news be good or bad?

| 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.

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop

Image source: Getty Images

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.

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.

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.

Paul Summers owns shares in Persimmon Plc. The Motley Fool UK has recommended Pearson Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Shot of a senior man drinking coffee and looking thoughtfully out of a window
Investing Articles

£20,000 in savings? Here’s how I’d aim for £14,710 a year in passive income

With spare savings, this Fool would start generating passive income for a more comfortable retirement. Here he details how he'd…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

£9,000 in savings? Here’s how I’d try to turn that into £581 a month of passive income

Relatively small investments in high-yielding stocks can grow through the power of dividend compounding into significant passive income.

Read more »

Photo of a man going through financial problems
Investing Articles

These are the FTSE’s biggest dogs over the last year!

The FTSE 100 has fallen far behind other major market indices over the past 12 months. However, these three sliding…

Read more »

Investing Articles

My top 3 stock market lessons from the Nvidia volcano eruption

Can we learn anything from the explosive rise in Nvidia's share price? Here are three Foolish reflections from this stock…

Read more »

Abstract 3d arrows with rocket
Investing Articles

Is boohoo the best near-penny stock to buy today?

This Fool asks why the boohoo share price has collapsed and whether now might be a good time to invest…

Read more »

Smiling white woman holding iPhone with Airpods in ear
Investing Articles

A brilliantly reliable FTSE 100 share I plan to never sell!

This FTSE-quoted share has raised dividends for more than 30 years on the spin! Here's why I plan to hold…

Read more »

Asian man looking concerned while studying paperwork at his desk in an office
Investing Articles

This 7.7% yielding FTSE 250 stock is up 24% in a year! Have I missed the boat?

When a stock surges, sometimes it can be too late to buy shares and capitalise. Is that the case with…

Read more »

Investing Articles

£13,200 invested in this defensive stock bags me £1K of passive income!

Building a passive income stream is possible and this Fool breaks down one investment in a single stock that could…

Read more »