US Consumer Confidence (Feb) – 24/02 – Despite a reasonably strong end to 2025, US consumer confidence sank to a 12-year low in January, taking out Covid lows, dropping by almost 10 points from 94.2 in December, amidst a backdrop of concern over the prospects for the US economy. The survey cited concern over higher prices for food, gasoline as well as various other groceries for the decline in confidence. The slump is all the more surprising given that on the basis of most other data the US economy still seems in reasonably good shape. If the Atlanta Fed is to be believed the economy did even better in Q4 then it did in Q3 despite the US government shutdown which seems a stretch. Maybe this is yet another example of the K shaped economy we are hearing so much about. It will be interesting to see whether February sees a modest rebound?
Diageo H1 25 – 25/02 – Having undergone years of share price weakness there does appear to be some evidence of a share price revival since the start of the year, with the new management under ex-Tesco boss Dave Lewis hoping to turn the page on years of decline. With the shares nudging up against their 200-day SMA the next few weeks could be pivotal when it comes to further share price gains. Having been at levels of over £40 at the end of 2021, it’s been a slow glide lower in the years since then with the shares falling to lows of 1,565p earlier this year. Back in November when the spirits and Guinness maker reported its Q1 numbers the shares did undergo a modest rebound before slipping back once again into year end. With an enviable stable of brands, the company ought to be doing better, however the numbers don’t lie. When the company reported in November, full year guidance was cut due to weakness in North America and the Chinese white spirit’s market. Reported net sales for Q1 were down 2.2% to $4.87bn, however there were some green shoots in Europe, Latin America and Africa. For the outlook Diageo said it now expects to see organic net sales growth of flat to negative, but remain on track to deliver $625m in cost savings over the next 3 years. As far as US tariffs are concerned the expectation is for a $200m overhead assuming no change in rates. It’s no secret that management has made mistakes over the past few years when it comes to addressing the various problems that the company has had to face, which have included inventory issues, changing consumer habits amongst many questionable management decisions. With ex-Tesco boss Dave Lewis now at the helm the optimistic take is that we’ll start to see progress given how he managed to turn Tesco around all those years ago, and the fact that on a P/E basis the stock is cheap.
IAG FY 25 – 27/02 – It’s been a slow but sure recovery for the IAG share price as it looks to close on the peaks we saw back in 2018, and which saw the share price plunge from the heady heights of 482p to as low as 89p in the aftermath of the Covid lockdowns. It’s not all been plain sailing, or flying to be more precise with a few air pockets along the way but the owner of British Airways has seen a strong rebound from the April 2025 lows of 210p to more than double since then. In November we did see a minor setback when the airline published its Q3 numbers after revenues came in soft due to weakness on its transatlantic routes to the US. Q3 revenue came in unchanged at €9.3bn, while operating profit rose 2% to €2.1bn, both of which were below consensus. Passenger revenue per available seat (ASK) fell 2.4%, with a 7.4% decline in the North Atlantic region. Despite this IAG kept their guidance for the full year unchanged, while increasing the dividend to €0.048 per share, while saying it had nearly completed its €1bn share buyback. CEO Gallego hinted at the possibility of further shareholder returns when the airline reports its full year numbers. While this may well be cheered by shareholders there is no question that recent changes to the loyalty plan as well as the lack of upgrades to some aircraft is driving some passengers into the arms of rival airlines. Here’s a thought, perhaps use some of those buyback funds to upgrade some of your aircraft interiors.
HSBC FY 25 – 25/02 – Having seen the shares drop sharply in October, after HSBC announced they would be taking a $1.1bn hit on the back of the Madoff fraud case, as well as suspending the buyback to buy the rest of Hang Seng they didn’t already own the shares have gone on to put in new record highs. A few days later in its Q3 trading announcement the bank said it was upgrading its full year guidance, despite a fall in profits. Q3 profits before tax fell 11% from last year, coming in at $7.3bn, but crucially the number was still higher than Q2’s $6.3bn. Q3 revenue came in at $17.8bn, a rise of 5% helped by growth in fee income in the Hong Kong business segments of wealth and Premier banking. Net interest margin was slightly higher at 1.57%, while (NII) Net Interest Income increased to $1.1bn. Both customer lending and customer deposit balances were both up on last year. An interim dividend of 10c a share was announced. On a regional basis, the UK bank showed few signs of customer stress with Q3 revenue up by 6% at $3.3bn, although profits were lower by $81m at $1.64bn due to higher provision of ECL of $271m, an increase of $91m, or 51%, as well as higher operating costs. There was also higher provision with respect to commercial real estate, both here in the UK as well as HK, with the total set aside in the region of $6.8bn. On the outlook the bank said it expected to deliver NII of $43bn or better in 2025, as well as a mid-teens or better RoTE for 2025, despite the extra cash that is being used to buy the rest of Hang Seng Bank, with the cash that had originally been allocated to buybacks being used to facilitate this.
Rolls-Royce FY 25 – 26/02 – One of the best performing UK companies over the last 3 years, with the shares up over 1,500% from their 2022 lows and having just pushed above the £100bn market cap the outlook for the company continues to look promising, with new record highs again this week after a decent set of numbers from sector peer BAE Systems. When the company reported in Q3 the company said it was trading in line with expectations, keeping its full year guidance unchanged. Full year underlying profit of between £3.1bn and £3.2bn and free cash flow of £3bn to £3.1bn. The business is being supported by strong demand in its civil aerospace division with large engine flying hours rising by 8% to 109% of pre-pandemic levels. One recent new order saw Rolls agree a deal with Delta Airlines for 30 Trent XWB-84 and 32 Trent 7000 engines. On the defence side, in October, Turkey and the UK signed an agreement to export 20 Eurofighter Typhoon aircraft, with an option for more in the future, which will be powered by EJ200 engines. On the SMR business there has been progress in moving forward in agreeing commercial terms with GB Energy. There has also been chatter over the past few months that Rolls-Royce could move a big jet engine project away from the UK to the US or Germany if it doesn’t get the financial backing from the government that it needs to help finance the project. The R&D cost is expected to be £3bn with high power costs expected to play a part in any final decision. This would be a huge blow to the UK and once again serves to illustrate the challenges facing any big business when it comes to operating in the UK, especially in terms of projects that require heavy power requirements.
Nvidia Q4 and FY 25 – 25/02 – since peaking in October Nvidia’s share price has lost momentum somewhat, although crucially so far has managed to hold above its 200-day SMA at close to $170 a share. Concerns about a bubble in AI have contributed to some caution about driving the gains even further from levels of $14 a share only 3-years ago. When Nvidia reported in Q3 the company once again comfortably beat expectations despite an extraordinarily high bar. At the end of Q2 Nvidia said they expected revenues for Q3 to come in close to $54bn, and sure enough the beat was reasonably comfortable at $57.01bn with profits of $1.30 a share, equating to an increase of 65% and $31.9bn in net income. Data centre sales accounted for $51.2bn of that total. For Q4 the company said they were looking to see $65bn of sales, +/-2%, well above most forecasts along with profits of $1.43 a share. The significant improvement in guidance suggests little indication of any slowing of demand for these high specification chipsets, with CEO Jensen Huang saying that sales of the Blackwell chips are off the charts and cloud GPUs sold out. Gross margin was 73.4%, which while 1% above Q2 was down from the same quarter last year which was 74.6%. Amongst the notable items was the plans to accelerate 7 new supercomputers including with Oracle to build a huge AI supercomputer for the US Department of Energy featuring 100,000 Nvidia Blackwell GPUs. The bigger question
Home Depot – Q4 2026 – 24/02 – Q4 generally tends to be a tricky quarter for DIY stocks given seasonal cold weather prompts a slowdown in consumer spending in this area. When the company reported in Q3 the shares fell sharply after the US DIY chain warned on its outlook and slightly missed on profits, although we’ve seen a modest recovery since then. Q3 revenues came in ahead of forecasts at $41.35bn, up 2.8% on last year, however profits came in at $3.62 a share, in line with last year but below market consensus. The retailer also cut its full year guidance on profits, saying that it expected to see a 5% decline in adjusted EPS from last year’s $15.24, with comparable sales growth only expected to be slightly positive for the year. Total sales growth of 3% is forecast due to the inclusion of GMS to the numbers which is expected to add $2bn in incremental sales. The downgrade to guidance was driven by concerns that consumers were showing a reluctance to take on expensive projects while the better weather in Q3, or lack of storms meant that total spend was down on the previous year when storm damage helped to boost sales.