This week’s shaping up to be a big one for UK investors. There will be news on a number of popular shares, including Lloyds (LSE: LLOY). We’re also going to see a major Initial Public Offering (IPO).
Here are three things to watch out for.
Lloyds’ Q3 results
On Wednesday (23 October), Lloyds is going to post its Q3 results. This will give us more insight into how the bank’s performing right now, including its net interest margin and the amount of impairment charges it’s facing.
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Two factors that investors are likely to pay close attention to are guidance for the full year and costs associated with the Financial Conduct Authority’s (FCA) motor finance probe. Already, Lloyds has set aside £450m for this issue, but costs could be higher.
It’s worth noting that Lloyds shares have had a good run recently and are currently trading near 52-week and four-year highs. So if earnings or guidance come in below expectations, the shares could be volatile.
In terms of valuation, the shares currently trade on a forward-looking price-to-earnings (P/E) ratio of about 9.3. Personally, I think they’re fully valued at that earnings multiple, but others reckon there’s still some value on offer.
Tesla’s Q3 earnings
Also on Wednesday we have Q3 earnings from Tesla (NASDAQ: TSLA). This is another popular stock with UK investors.
We’ve already had Tesla’s delivery numbers for Q3. For the period, the company delivered 462,890 vehicles, up about 6.4% year on year (but below the consensus forecast of 469,828).
The Q3 results will give us insight into revenues and earnings. Currently, the consensus forecast is for revenue of $25.5bn (up 9% year on year) and earnings per share of 60 cents (down 9% year on year), according to FactSet.
If Tesla can beat these estimates, the stock could rise, as it’s fallen in the last few weeks after the underwhelming robotaxi event. However, if the company misses these numbers, I’d expect the stock to fall. Because, right now, the valuation’s very high (the P/E ratio is about 100).
One thing I’ll be watching out for is news in relation to a smaller, more affordable vehicle. If it was to bring this kind of vehicle to market, I think it could be very popular.
Applied Nutrition IPO
Finally, we have the Applied Nutrition IPO. This is set to take place on Thursday (24 October) and it will be one of the biggest UK IPOs this year.
I covered this event earlier in the month in an article entitled ‘Should I buy Applied Nutrition shares in or after the IPO?’. So I won’t go into a lot of detail here.
I do think the IPO looks interesting however (I’ve applied for some shares). There’s no guarantee it will be a success (some IPOs do well while others flop). However, Applied Nutrition operates in a fast-growing market and its revenues have been rising at an impressive pace in recent years. And it’s only aiming for a market-cap of around £400m.
It’s worth noting investors still apply for shares in this IPO through Hargreaves Lansdown. Applications close at 9am Wednesday. The minimum application is £250.
