Week 4 of the ASX reporting season sees some huge names updating the market on their recent performance.
The ASX has had a great run of late, with the market more broadly trading at a P/E ratio of around 18x earnings. Investors will want to see their companies meeting or even exceeding guidance.
Here are 4 ASX shares to watch during week 4 of reporting season.
Appen Ltd (ASX: APX) – Tuesday
Appen is set to announce its FY19 full-year results on 25 February. The company raised guidance back in November, with November and December results based on an AUD/USD exchange rate of 74 cents.
Estimated full-year underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for FY19 was raised from $85 million – $90 million to a range of $96 million – $99 million.
Investors will be expecting Appen to at least meet this revised guidance.
Rio Tinto Limited (ASX: RIO) – Wednesday
One of the largest companies on the ASX releases its FY19 annual results on Wednesday 26 February.
The iron ore price has come back a fair way since peaking at US$123 in July 2019. With that said, 2019 was a good year for strong commodity prices.
Analysts at Morgan Stanley expect the iron ore price to drive earnings for Rio, forecasting a 44% growth in earnings per share (EPS). This, combined with a healthy balance sheet and relatively low capital expenditure commitments, could see dividends rise.
Nanosonics Ltd. (ASX: NAN) – Wednesday
Owning shares in Nanosonics has served investors well in recent history. The stock price has more than doubled over the last year. The company's Trophon medical device is used to sterilise ultrasound probes. Key advantages of the machine is that it is automated, while not requiring any chemicals.
Investors will want to see continued strong growth in the installed base of Nanosonics. Increases in the installed base today leads to greater high margin consumables revenue in the future. The company estimates that it only has 17% global market share.
Afterpay Ltd (ASX: APT) – Thursday
Afterpay has executed extremely well to date in the United States (US). The US market opportunity dwarfs that of Australia and New Zealand. As such, investors will have a keen eye on the growing relationships Afterpay has with US and global brands.
The strong execution to date has seen the Afterpay share price more than triple since the start of 2019. Afterpay now has more than a $10 billion market capitalisation, despite note being profitable.
