ASX 200 shares are still reeling from the economic impact of COVID-19. Reporting season, more broadly speaking, has highlighted ASX 200 companies experiencing flat revenue growth and weaker profits, but more predictable cash flows have enabled increased dividend payments and improved balance sheets across many companies.
According to Commsec, the 91 ASX 200 shares that have reported earnings so far have shown:
- Aggregate revenues +2%
- Expenses +4%
- Net profit -15.2%
- Dividends +5.8%
- Cash +49.2%
With that in mind, the last week of reporting season is arguably the most exciting with many big names due to update the market.
ASX 200 shares reporting this week
Woolworths Group Ltd (ASX: WOW)
Woolworths is expected to report its half-year FY21 (1H FY21) results on Wednesday 24 February. The expectations are running high for the supermarket giant as in-home consumption has propped up earnings for many consumer staple-related businesses. Coles Group Ltd (ASX: COL) has already set a high bar following its strong 1H FY21 result that demonstrated its successful channel and trading plan execution, and increased demand for in-home consumption associated with COVID-19. Despite the strong report, the Coles share price finished the week down almost 10%, perhaps pointing to much of its strong performance already being priced in.
The question is whether or not Woolworths will be able to exceed expectations, or will its share price meet the same fate as Coles.
Appen Ltd (ASX: APX)
The Appen share price fell off a cliff in early December 2020 after it announced a negative trading update. The company noted that while Q4 had improved on Q3, the usual ramp up it traditionally sees at this time of the year was not occurring. Since the update, the Appen share price has continued to grind lower to a 9-month low of $21.60. Appen is expected to report its FY20 results on Wednesday 24 February.
WiseTech Global Ltd (ASX: WTC)
The Wisetech share price has underperformed its peers so far this year, increasing only 2.5% compared to the 4.3% increase in the S&P/ASX 200 Info Tech (ASX: XIJ) index.
Back in December 2020, Citi cited that it did have concerns that Wisetech's acquisitions could take longer to integrate and deliver on expected returns. It feared that the market wasn't factoring such risks into its share price and believed this could pose meaningful downside risks to forecasts.
That said, WiseTech has provided the market with an outlook and FY21 guidance recently. This includes FY21 revenue to be in the range of $470 million to $510 million or a 9–19% increase on FY20. Its FY21 earnings before interest, tax, depreciation and amortisation (EBITDA) is anticipated to be in the range of $155 million to $180 million or a 22–42% increase on FY20. WiseTech is expected to report its results on Wednesday 24 February.
Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P)
Afterpay and Zip are both expected to report their much-anticipated results on Thursday 25 February.
Morgans has forecast a 1H FY21 revenue of $473 million and net profit after tax (NPAT) of $5 million for Afterpay. This would mark the company's first ever profit.
The broker also forecasts 1H FY21 revenue of $162 million and a NPAT loss of $25 million for Zip.
A2 Milk Company Ltd (ASX: A2M)
The A2 Milk share price has been impacted by pantry destocking, weak sales to the daigou channel in Australia and slow sales through its cross-border e-commerce channel. There are mixed views about where A2 Milk is going next, with Citi retaining a sell rating and share price target of $9.40, while Morgans maintains a buy rating with a price target of $12.20.
A2 will put the divided ratings to rest as its reports its 1H FY21 results on Thursday 25 February.
