Primark, Primark, Primark. That's all you ever seem to read about when results from Associated British Foods (LON:ABF) are announced.
So it should be no surprise that Panmure Gordon is predicting "a stunning performance by Primark" when the group announces half-year figures on Tuesday.
The broker predicts a 15.9% rise in earnings per share (EPS) to 39.9p, and 16.3% profit before tax growth to £422mln.
"The key driver of growth in H1 is expected to be a 44% jump in profits at Primark and a 31% rise in Grocery (the latter primarily reflecting lower restructuring charges this year). Net debt is expected to fall sharply, from £1592m in March 2012A to c.£1250m in March 2013E," Panmure Gordon said.
Chip designer ARM Holdings (LON:ARM) is another go-go stock. It is due to give a first quarter interim management statement on Tuesday.
Goldman Sachs's first quarter revenue estimate is 2% of the company-collected consensus forecast at £162mln, while its EPS forecast of 4.61p is 4% ahead of the median forecast.
"In our view, dominant market share is likely to provide ARM with a continuously inflationary blended royalty rate that we believe is not reflected in its current valuation. This is a significant swing factor in our DCF [discounted cash flow] analysis, based on our forecast for royalty revenues to more than triple over the next five years. Growing markets, rising share, and pricing power combined pave the way towards our 2017 EPS scenario of 50p, suggesting sustainably high compound EPS growth (28% 2012-17E)," the banking colossus said.
The bank recently added ARM to its "conviction buy" list, following a pull-back in the share price.
Significant announcements expected
Companies: Next Fifteen Communications, ARM Holdings, 888 Holdings, Associated British Foods, Premier Foods, Segro, AVEVA, Petropavlovsk, Carpetright, Dragon Oil
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