Next week on the stock market

Reckitt reports full-year results next week and if there’s one thing it needs to deliver, it’s improving volumes. Third-quarter results disappointed and the concern remains that consumers have yet to fully digest higher prices. Management was quick to give positive commentary on volumes, which are expected to improve over the fourth quarter. But there was no specific guidance given on when their growth might turn positive again.

There’s scope for margin expansion if volumes can start to move in the right direction over 2024, so guidance and commentary here will be watched closely. Given the valuation drop over the past couple of years, it won’t take much to give sentiment a boost. Of course, there are no guarantees.

After two guidance upgrades in 2023, Haleon’s full-year results are expected to show organic revenue growth of between 7-8% with faster growth of 9-11% for underlying operating profit. 2023 saw high levels of cold and flu which will have directly boosted sales of products such as Theraflu and Otrivin, and will have done no harm to the Group’s vitamin supplements and painkillers. We’ll be looking to see if this has persisted into 2024, as all eyes turn to the outlook for this period and beyond.

Based on forward earnings, the shares trade in line with the peer group, but they offer a lower yield. Given the relatively high debt levels, the gap is unlikely to close any time soon. With this in mind, there’s certainly some pressure to deliver an acceleration in growth. Despite Haleon’s impressive portfolio of brands, this may still be challenging in the current economic environment.

Next week we’ll get a glimpse into the health of the UK housing market, with Taylor Wimpey reporting full-year results. Last we heard, the order book had slipped 8.7% lower to £1.8bn. And despite 2023’s operating profit expected to come in at the top end of the group’s £440-470mn guidance, it still marks a rough halving from the prior year. But a robust landbank and a healthy net cash position of £678mn at year-end should help provide a cushion to any potential bumps in the road.

Looking to 2024, we’re keen to hear where Taylor Wimpey casts its official guidance, with markets currently forecasting revenue and profits to fall at low single-digit rates. Against an improving backdrop of falling mortgage rates and lower build-cost inflation, which should improve affordability for buyers, we wonder if there’s room for a few positive surprises in next week’s update.