(Bloomberg) -- Novo Nordisk A/S may follow drugmaker peers in raising guidance when it reports this week, as Europe’s most valuable company races to keep up with insatiable demand for its weight-loss therapy Wegovy.
Even if it manages to pull some extra production capacity out of the hat, Novo is already headed for the top end of its forecast sales and earnings range, so an upgrade could well be in the cards, according to analysts at Sydbank.
The region’s health-care sector has positively surprised so far in the current season, with average earnings-per-share growth of 4%, defying expectations for a decline, according to data tracked by Bloomberg Intelligence.
Meanwhile, Europe’s largest economy Germany — where gross domestic product unexpectedly contracted in the three months to June — is emerging as a trouble spot. The benchmark DAX Index slid 2.3% on Thursday after disappointing reports from Volkswagen AG and BMW AG. This week, it’s the turn of industrial heavyweights Siemens AG, Continental AG and Bayer AG.
The world’s largest oil producer, Saudi Aramco, is also due, as are ad agency WPP Plc and food delivery company Deliveroo Plc.
Highlights to look out for:
Monday: Infineon (IFX GY) reported early Monday. Its third-quarter revenue came in shy of estimates, as did the forecast for the fourth quarter, after a delay in the hoped-for resurgence in the electric vehicle market. The full-year revenue guidance of about €15 billion compares with its previous forecast range of €14.7 billion to €15.5 billion, and would mark the first annual decline since 2013.
Tuesday: Aramco (ARAMCO AB) may report a slight decline in second-quarter profit, as an increase in benchmark oil prices failed to offset a drop in production, consensus shows. The company may gradually lift output in the fourth quarter if OPEC+ sticks to its current plan to start tapering cuts, BI said. The $124 billion of total dividend payments in 2024 point to an increased yield of 6.8%, one of the highest among oil majors, analyst Salih Yilmaz said.
- Bayer’s (BAYN GY) sales probably fell for a sixth straight quarter while adjusted Ebitda is seen down 16%, as bad weather hampered the crop science business and patent expirations chipped at sales of blood thinner Xarelto. Currency headwinds could spoil the full-year outlook, Deutsche Bank analysts said. “As Bayer targets a stronger balance sheet, costs look increasingly critical to buttressing margins and cash,” BI analysts Jason Miner and Michael Shah said.
Wednesday: Novo (NOVOB DC) is expected to post a more than 80% jump in Wegovy sales and a 34% increase in revenue from diabetes drug Ozempic. “Supply remains a key focus of investors and the gating factor for growth over the midterm,” BI’s Shah said. As competition heats up on the obesity market, attention is also shifting to the company’s pipeline of experimental medicines, where it hasn’t all been plain sailing. Novo had a rare setback in June, when it halted a late-stage study of a heart drug it acquired last year.
- Continental (CON GY) will be relying on China growth — flagged in July — to offset sluggish demand in Europe for the automotive unit and keep the company on track to meet its full-year targets. Easing raw-material costs may act as a tailwind for margins, according to BI. Consensus points to a 6.7% adjusted Ebit margin for the group and a slight dip in revenue to €10.3 billion.
- WPP’s (WPP LN) results should show the ad agency inching toward recovery, with organic net sales seen dipping 0.2% but bettering the 1.6% slump of the first quarter. Easier year-earlier comparatives, a potential improvement in campaign spending by tech clients and a healthy new business pipeline could spur a return to growth in the second half, although WPP will probably still trail rivals this year, according to BI. That may move cost cuts to the fore.
Thursday: Siemens’ (SIE GY) third-quarter results should tally with guidance, according to Jefferies. The company will probably reiterate that it expects the business environment in China to remain weak until 2025, particularly for the Digital Industries segment, a message the market would take positively as it would indicate the situation isn’t worsening and the weakness is cyclical, not structural.
- Deliveroo (ROO LN) likely saw a sequential improvement in gross transaction value growth in the second quarter, driven by the revival in its International business. Rival Just Eat Takeaway.com’s proposed exit from France may strengthen the UK company’s position in the country, where it saw orders accelerate in the first quarter, BI analyst Tatiana Lisitsina said.
Friday: No major earnings of note
--With assistance from Christian Wienberg, Laura Alviž, Laura Malsch, Alexey Anishchuk, Andrey Biryukov and Christopher Elser.
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