Earnings season is now in full swing, with a number of key companies due to report in the coming week, including four of the Magnificent 7 tech giants in focus.
Uncertainty over US president Donald Trump's tariff plans continues to loom large over markets, with investors eager to find out more detail from companies as to how a US-China trade war could impact their businesses.
Investors will be keeping an eye out for an commentary on potential disruption from tariffs from Mag 7 companies Apple (AAPL), Microsoft (MSFT), Meta (META) and Amazon (AMZN) when they report in the coming week.
Fears of a tariff-induced recession and the effect this could have on fuel demand have weighed on oil prices, adding to pressure on the likes of Shell (SHEL.L), which is set to report on Friday 2 May.
Major UK-listed banks are also set to be in the spotlight on the London market, with HSBC (HSBA.L), Lloyds (LLOY.L), Barclays (BARC.L) and NatWest (NWG.L) all slated to report in the coming week.
Here's more on what to look out for:
Apple (AAPL) – Releases second quarter results on Thursday 1 May
US stock markets have fluctuated as investors respond to different messages from the Trump administration around tariffs, particularly those on China, where many of Apple's (AAPL) products are made.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said that while iPhone-maker Apple had "managed to wriggle out of the worst of the tariff moves, with Trump having excluded smartphones and other electronics goods from super-high tariffs on Chinese imports, the company is likely to be bracing for a bite to be taken out of sales."
"There is still uncertainty about what the future will hold, given that the exemptions may still be temporary, especially as Trump ultimately wants more phone manufacturing to be based in the US," she said. "Given that the furore has also knocked consumer confidence around the world, shoppers may still be more cautious about spending big on little devices in the months ahead, whatever AI promises are dangled."
"Apple still boasts enviable brand power, but iPhone sales have underwhelmed in the US, due to fewer upgrades than hoped.
"Growing hardware sales is also crucial to propel growth in Apple’s Services segment. With competition in key markets, especially China, increasing, Apple could still be facing crunch time in terms of growth."
Iphone sales have underwhelmed in the US. ·PUNIT PARANJPE via Getty Images
She said that full-year revenue expectations for Apple were edging lower, "given the upset US trade policy is provoking."
For the second quarter, sales are expected to be up 3% year-on-year at $93.6bn (£70.4bn), while earnings per share is estimated to have grown by 5% to $1.60, according to analyst consensus forecast data provided by AJ Bell.
Total revenues in the first quarter came in at $124.3bn, which was up 4% on the same period in the previous year, while earnings per share rose to $2.41 from $2.19.
Apple shares fell following the company's first quarter update and are down 18% year-to-date.
Microsoft (MSFT) – Releases third quarter earnings on Wednesday 30 April
Reaction to earnings releases from Microsoft (MSFT) and Meta (META), due out the day before Apple (AAPL) and Amazon's (AMZN), should set the tone in terms of investor sentiment towards the Mag 7.
Investors will be keen to find out any more details on Microsoft's AI data centre plans, after it recently revealed that it would "slowing or pausing" some projects.
Streeter said that Microsoft is in "one of the strongest positions to benefit from the AI revolution given that artificial intelligence can be integrated into the majority of Microsoft's existing products," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
"Within Azure, it’s Cloud services division, demand for AI services has been a big growth area, attracting new clients as Microsoft competes against rivals like Amazon’s AWS."
"Because of this it’s set to stay sensitive to concerns about lower demand for AI technology amid the uncertainty," she added. "It has already reduced the scale of some data centre projects in the US and Europe, and any hint of a further reduction in demand could lead to further volatility in the share price."
In terms of performance, Microsoft's revenue in the fourth quarter of $69.6bn came in just ahead of consensus estimates of $68.92bn, while earnings per share of $3.23 beat expectations of $3.11, according to a Reuters report.
Shares fell after the release of the company's second quarter earnings and have failed to recover since, trading more than 10% in the red year-to-date.
Shell (SHEL.L) – Releases first quarter results on Friday 2 May
Oil prices are now trading at their lowest point in nearly four years, with brent crude futures (BZ=F) down at $65.67 a barrel, amid fears about the impact of a recession on demand for fuel.
In addition, there are also concerns about an increase in supply as demand slows. Reuters reported on Wednesday that several members of the OPEC+ group of leading oil-producing countries suggested that the organisation will accelerate oil production increases for the second consecutive month in June.
Lower oil prices impact the profit companies make from refining the commodity, putting pressure on the likes of Shell (SHEL.L) and BP (BP.L), which are both reporting in the coming week.
Shares in Shell are down 1.8% year-to-date, with the stock having seen a sharp fall following a trading update in early April, in which the company warned that it expected to see lower liquified natural gas (LNG) volumes in the first quarter of 2025.
The energy giant said that the updated forecast reflected the impact of cyclones, as well as unplanned maintenance, in Australia.
As for oil, Shell said it expected to generate upstream output of 1.79 million to 1.89 million barrels equivalent per day. This compared to a previous forecast of 1.75 million to 1.95 million barrels equivalent per day. In addition, the company posted an indicative refining margin of $6.2 (£4.82) a barrel for the first quarter, which would be up from $5.5 a barrel in the previous three months.
Oil prices are trading at their lowest point in nearly four years. ·ZUMA Press, ZUMA Press, Inc.
AJ Bell's (AJB.L) investment experts Russ Mould, Danni Hewson and Dan Coatsworth said that analysts expect adjusted earnings to come in at $5bn in the first quarter.
"For the moment, analysts expect a 6% increase in full-year pre-tax income to $31.6bn, but given trends in the oil and gas price, it seems logical to assume earnings will come in lower in the first quarter of 2025 than they did in the first three months of 2024," they said.
They said: "The bulk of the drop [in adjusted earnings] is expected to come from the integrated gas and chemicals operations, with renewables and energy solutions also showing a decline."
The AJ Bell team said that shareholders would focus on cash returns "especially as Shell’s March analysts meeting laid out plans to increase them, and peer and rival BP is under pressure from activist investor Elliott to boost cash flow so it can presumably do the same."
In the fourth quarter, Shell nudged up its dividend to $0.3580 and Shell CEO Wael Sawan launched a $3.5bn share buyback for the first quarter, compared to the $2.8bn programme run in the same period of the previous year.
HSBC (HSBA.L) – Releases first quarter earnings on Tuesday 29 April
Banks will be the other major reporting focus on London markets for the week ahead, starting with HSBC (HSBA.L) on Tuesday.
"HSBC’s shares had come within a whisker of 2001’s all-time high back in March, just before president Donald Trump announced his reciprocal tariffs on ‘Liberation Day’ on 2 April," said AJ Bell's Mould, Hewson and Coatsworth.
"They have fallen by around a sixth since then, so it will be interesting to see if chief executive Georges Elhedery is as upbeat now as he was at the time of the 2024 full-year results in February," they said. "Back then, Mr Elhedery and the board felt confident enough to sanction an increased dividend, a new $2bn share buyback and raise targets for return on equity in 2026 and 2027."
In the full-year results, HSBC also revealed more details about its cost-cutting drive, on the back of CEO Georges Elhedery unveiling an overhaul of the bank's structure in October, shortly after taking the reins.
The bank said it aimed to generate around $300m of cost reductions in 2025, committing to an annualised reduction of $1.5bn in its cost base expected by the end of 2026. To deliver these reductions, the bank said it planned to incur severance and other up-front costs of $1.8bn over 2025 and 2026.
Analysts expect HSBC's full-year dividend to increase to $0.665, from $0.61. ·Robert Evans
In terms of performance, HSBC's profits before tax rose by $2bn to $32.3bn in 2024, though revenue dipped to $65.8bn, versus versus $66.1bn in 2023.
Net interest income (NII) — the gap between what it pays out to savers and receives from borrowers in interest — fell by $3.1bn to $32.7bn. In its outlook, HSBC (HSBA.L) said it expected to generate banking NII of $42bn in 2025.
As for other financial metrics, AJ Bell's investment experts said that analysts anticipate a like-for-like drop in pre-tax income to $7.8bn in the first quarter, "thanks, in the main, to lower trading gains, higher one-off costs and increased loan loss charges."
A key point of note will be HSBC's cash return to shareholders, with analysts expecting the bank's full-year dividend to increase to $0.665, from $0.61.
"At current exchange rates that is worth some £9bn, equivalent to a dividend yield of more than 6%," said Mould, Hewson and Coatsworth. "Further buybacks are anticipated as well, to take the total cash return to more than 12% of the bank’s current stock market capitalisation, but it remains to be seen whether management feels such largesse is prudent in light of the ongoing macroeconomic uncertainties."
Lloyds (LLOY.L) – Releases first quarter results on Thursday 1 May
Shares in Lloyds rose following the company's full-year results in February, despite it reporting a 20% drop in profits, with the stock currently trading at its highest point since 2018.
Lloyd's posted a pre-tax profit £5.97bn ($7.94bn) for 2024, which was down from £7.5bn in 2023. Analysts had predicted a slightly higher profit of £6.39bn, according to a consensus compiled by Reuters. Underlying NII for the year fell 7% to £12.8bn amid falling interest rates.
The bank also revealed that it had set aside a further £700m for potential remediation costs relating to relating to motor finance commission arrangements, taking the total it had put aside to £1.2bn.
The motor financing scandal over how consumers have been sold car loans has opened up the possibility that lenders could end up paying out tens of billions of pounds in compensation. In October, the court of appeal ruled it unlawful for dealerships to receive commissions on car finance deals without securing “fully informed consent” from buyers.
Lenders Close Brothers (CBG.L) and FirstRand (FSR.JO) have sought to overturn the ruling, and the case headed to the UK's supreme court earlier this month to hear evidence, before it makes judgement on the issue, which is expected in July.
The Financial Conduct Authority (FCA), the UK regulator, has said the supreme court's decision would inform its next steps and would confirm if it was proposing a redress scheme within six weeks of the ruling.
Lloyds owns motor finance company Black Horse, which is one of the biggest car finance providers in the UK.
Barclays (BARC.L) analysts Aman Rakkar and Grace Dargan said in a note on 14 April that Lloyds was one of their top ideas among European banks and had "some of the strongest fundamentals across the sector with a potential catalyst from motor finance coming over the next few months."
"Although full clarity on any redress scheme is unlikely before Q4, we expect the judgement and FCA announcement can eliminate the worse case tail-risks priced in by the market," they said.
The analysts said that they expected to see some of the highest earnings per share growth from Lloyds in the sector at around 65% over 2025 to 2027.
In terms of guidance for 2025, Lloyds said it expected to see underlying NII of around £13.5bn and operating costs of approximately £9.7bn.
AstraZeneca (AZN.L) – Releases first quarter results on Tuesday 29 April
Pharmaceuticals giant AstraZeneca (AZN.L) was another "overweight" rated stock Barclays (BARC.L) analysts highlighted as their UK ideas for the second quarter, in the same note on 14 April.
Barclays' analysts Emily Field and Shirley Chen highlighted three major catalysts for the stock this year — its studies around cancer drugs Datroway and Camizestrant, as well as blood pressure medication Baxdrostat.
They said that three reasons why they liked AstraZeneca in an increasingly choppy market and macro-environment were that it offered "best-in-class science, [had] global geographic and product diversification [and had a] best-in-class management team."
At the same time, there is still uncertainty over the nature of tariffs that the Trump administration could impose on the pharmaceuticals sector.
On Wednesday, the bosses of key pharmaceuticals companies urged the European Union to allow them to raise the price of medicines amid the uncertainty over tariffs.
Pascal Soriot, CEO of AstraZeneca, said that Europe should boost spending on health treatment, as it has done recently with investment in defence.
"The world order is shifting right now and Europe needs to invest more in what really matters to it," he said.
Barclays gave AstraZeneca stock an 'overweight' rating. ·Peter Byrne - PA Images via Getty Images
"Europe has stepped up to invest more in defence and now it must protect its health sovereignty."
“Europe spends a substantially lower share of GDP (gross domestic product) on innovative medicines than the US and, as a result, is falling behind in attracting R&D (research and development) and manufacturing investments, putting its ability to protect the health of its own people at risk," Soriot said.
Despite nervousness around tariffs, AstraZeneca shares are down less than 1% year-to-date. In the company's full-year results in February, the company posted a 21% increase in revenue for 2024 at $54.1bn and a 29% rise in reported earnings per share at $4.54.
AstraZeneca said it expected total revenue to increase by a high-single digit percentage in 2025 and core earnings per share to be up by a low double-digit percentage.
