FTSE 100 shares to watch: Lloyds, Unilever, AstraZeneca

The FTSE 100 index has moved sideways in the past two months and remains 3% below its highest point this year. It was trading at £8,200 on Thursday as investors focus on the next actions by the Bank of England (BoE) and the upcoming quarterly earnings by key companies.

Bank of England’s next moves

The FTSE 100 index will be in the spotlight as investors focus on the BoE interest rate decision scheduled on August 1st.

This will be an important meeting since the bank is expected to either cut rates or signal that it will cut in September.

The BoE has successfully brought the UK headline inflation to its target of 2.0%. However, a report released this week showed that core inflation remains above 3%, meaning that the bank may not cut in July as expected.

In a recent statement, Huw Pill, its Chief Economist, said that investors were getting too much hopeful about rate cuts. He expects that the cut will come later this year instead of July.

That view explains why the British pound has jumped sharply in the past few days. The GBP/USD pair has soared to its highest point since July last year while the EUR/GBP has plummeted to its August 2022 lows.

The FTSE 100 index does well when the BoE is either cutting rates or when it has signalled that rate cuts are coming. Such a move will move investors from the 5.25%-yielding gilts to the stock market.

Lloyds Bank earnings ahead

The most important FTSE 100 index company to watch next week will be Lloyds Bank, the biggest bank in the UK with over 26 million customers. It is also the most popular British stock among retail traders in the UK.

It will publish its financial results on Thursday this week and possibly lead to more volatility in the FTSE 100 index. These results will show whether the company is growing and demonstrate the impact of high interest rates.

The most recent results show that its total income rose to £11.3 billion in the first quarter, a big increase from £9.3 billion in the same period in 2023. Its net interest income, however, dropped by 11% to £3 billion, signaling that the impact of high rates is fading. Lloyds’ profit before tax dropped by 28%.

The consensus is that Lloyds Bank’s net income will be £4.3 billion, a drop from £4.65 billion a year earlier. Net interest income is expected to come in at £3.25 billion, down from £3.5 billion in 2023.

Unilever earnings ahead

The other top FTSE 100 index company to watch will be Unilever, one of the biggest consumer goods companies in the world.

As I wrote this week, Unilever’s results will provide more color about the state of consumers. The consensus among analysts is that Unilever’s turnover increased to €16 billion in the second quarter and by 1.8% in the first half to €30.9 billion. The underlying sales growth is expected to come in at 4.2% while volume growth will be 2.6%. 

These results will come at a time when Unilever’s stock price has soared to a record high as investors cheer its ongoing turnaround. For example, the management has announced plans to dispose off its low-margin and problematic ice cream business.

AstraZeneca earnings ahead

AstraZeneca, the biggest company in the FTSE 100 index, will also publish its financial results on Thursday. These numbers will come at a time when its stock has jumped to a record high despite losses in its vaccine business. 

The company has pegged its growth to acquisitions, which will help it solidify its position in the industry. It acquired Amolyt Pharma in March, a company that gives it exposure to rare diseases like chronic hypoparathyroidism.

AstraZeneca also acquired Fusion, a company using radioconjugates in the treatment of cancer. This is an important technology that aims to replace traditional treatments like chemotherapy and radiotherapy which have many side effects. In June, it received an FDA nod for a drug to treat endometrial cancer.

These acquisitions will help AstraZeneca to reach its ambition for $80 billion in annual revenue by 2030. It also expects that its investments in the weight loss industry will help it to achieve this goal. AstraZeneca made $45 billion in 2023, meaning that it will need to add $35 billion in the next few years. 

Other FTSE 100 companies to watch

There will be other FTSE 100 companies to watch next week. Rightmove, a company that operates an online real estate platform. Its numbers will provide more information about health of the property market. 

Rentokil Initial, a leading company in pest control, will also publish its results on Thursday. These numbers will come after Elliot Management took a stake in the company, which it believes is highly undervalued. Banco Santander and Centamin will also publish their results.