UK Staples Aston Martin, Taylor Wimpey and Just Eat Report

The UK equity market has experienced declines so far in 2024, with earning results contributing to negative investor sentiment. However, a new crop of earnings reports is coming up from staples of the British economy. Will they stand out from the pack?

A Challenging Economic Environment

UK stocks have underperformed this year against a backdrop of UK earnings missing forecasts. Data indicates retail investors, commonly bullish, have been withdrawing capital from British firms at unprecedented levels. Several major UK-listed companies will report in the coming days, providing an opportunity to assess their earnings performance against a challenging economic environment in the UK.

Investors will scrutinise the earnings closely for insights into operating conditions across different sectors. Particularly in light of recent GDP data confirming the UK economy has entered a technical recession. Should any corporate heavyweights deliver results exceeding lowered expectations, it may help lift overall market optimism.​

Taylor Wimpey

The UK homebuilder Taylor Wimpey is scheduled to report on Wednesday. This comes after the CNA announced earlier that it would open an investigation into the UK housebuilding sector due to concerns around estate management charges and build quality standards across the industry.

Taylor Wimpey has already provided investors with certain preliminary financial figures for 2023. Housing completions are expected to decline to approximately 10,800, down from 14,200 achieved in the previous year—management guidance for the 2023 financial year forecasts operating profit of £440-£470 million. The CMA investigation adds further uncertainty for Taylor Wimpey and the broader housebuilding sector.​

Aston Martin

Investors will be keen to see Aston Martin's direction in 2024 after the company saw significant declines. It follows reduced guidance in the previous year despite being the top-performing stock on its index in the prior period. In 2023, the company is expected to have £1.6 billion in sales, resulting in an EBITDA of £289 million - an improvement over 2022.

Analyst forecasts suggest Aston Martin is positioned to enhance profitability in 2024 following renewed investment from majority owner Geely and a recent electric vehicle partnership established in the United States market.​

Just Eat Takeaway

The Dutch-British company reported growth ahead of guidance in its full-year trading update. Investors will focus on the market outlook when the full-year earnings report is out on Wednesday. The ongoing situation regarding Grubhub will also be a point of focus.

After stating it had gained market share from its rival Deliveroo, many investors wonder whether the pace of growth can be sustained in an environment still impacted by the cost-of-living crisis.​

Aston Martin H&S?

Aston Martin may have completed a head-and-shoulders reversal pattern at 162p unless further bearish bets accumulate towards the neckline support. However, with the price still trading above the 78.6% Fibonacci retracement level of the entire uptrend to 400p, 150p could be a potential floor. A breakdown through this support area may expose the psychological 100p level. In contrast, a move back above the golden pocket at 204p could provide access to resistance around the right shoulder high of 240p.

Source: SpreadEx / Aston Martin

Key Takeaways

UK stocks have seen notable declines in 2024, as several major companies are set to report in the coming days. Investors will likely scrutinise operating conditions across sectors following recent data confirming a recession. Taylor Wimpey is scheduled to report on Wednesday following guidance of declining completions and profit forecasts. Aston Martin will be assessed behind recent stock declines but is still expected to report growth in sales and profit. And finally, investors might focus on the market outlook for Just Eat and the situation around Grubhub despite questions over the sustainability of its growth in a cost-of-living environment remain.