A round-up of comments on the banks Lloyds and Barclays, along with consumer goods maker, Unilever. In a week which saw Barclays report £3.95 bn profits, Lloyds a £5 bn swing to profit, and HSBC £7bn profits, Unilever were rather unfortunate in missing their target at £1.06 bn instead of £1.08 bn.
Instead Wyclef Jean announcing his dream to be Haiti President was considered more convincing - and results sent the share price down 200 pence (around 10 pct) worsened by worries over wheat prices after Russia banned exports.
"There can be no doubt that, together with our competitors, we face a tougher second half. In addition to a cautious consumer in Western Europe and North America we face difficult comparators from last year as well as the added burden of rising commodity costs. We are all competing hard, and there is no reason to believe that this is about to change." defended Paul Polman, Chief Executive Officer of Unilever - maker of Hellman's and Knorr.
"2Q results were marginally below consensus on underlying sales and operating margin, but were satisfactory in the context of the tough environment and peer performances. While there are many good things happening in the business, we expect the market will focus instead on the cautious comments re 2H." said RBS.
Perhaps the most relevant however is Japanese securities firm Nomura, who placed a 'reduce' rating on the stock one week ago, appear to have been right:
"With heightened expectations following the acceleration in volume growth in recent quarters coupled with strong margin progression, we see risk of disappointment as a combination of returning cost inflation, increasing competition." said their analyst, Alex Smith on 29th July.
Market consensus meanwhile remains a 'buy' as Hargreaves Lansdown stockbrokers note, 'the group's immense cash flow and exposure to emerging markets are likely to continue endearing it'.
Lloyds and Barclays on the other hand couldn't have been better.
"Lloyds results showed progress on all key issues. Impairments and the margin/revenue improved more quickly, which should lead to upgrades. The capital and funding positions also improved. We maintain our 80p price target and continue to see further upside from the current valuation." said Nomura analyst, Robert Law.
"Lloyds' bottom-up RoTCE proposition seems to be running ahead of market expectations. The 1H10 results lend material support to our view that Lloyds can generate an RoTCE of 19% and EPS of 15p in FY13F. These factors combined lead us to expect the re-commencement of ordinary dividends in 2H11F. Buy." said fellow state-owed bank, RBS who are more bullish, target price £1.20.
"Barclays delivered a disappointing set of 1H10 numbers. We had expected costs across all businesses to be constrained given the challenging revenue environment, but group costs grew 12% in 1H10. We expect this trend to improve, allowing Barclays to achieve a normalised 15% RoTCE. Reiterate Buy." - TP £4.10, RBS continued.
Nomura preferred Lloyds though:
"We continue to believe that the Barclays valuation is likely to be rangebound, until the market is prepared to re-rate capital markets groups, reflecting the size of BarCap." said Law, "Consequently, we continue to prefer Lloyds."