Blue-chip tobacco takes focus on Wednesday as BAT updates on trading

Investors in the FTSE 100 tobacco firm are likely to focus on its next-generation products as the number of cigarette and pipe smokers continues to fall

Cigarette and e-cigarette
Last year sales of BAT's next-gen products such as e-cigarettes rose by 95%

While the tobacco groups have been great dividend payers their shares prices have languished as the number of traditional cigarette and pipe smokers diminishes, so the focus has shifted to next generation products.

British American Tobacco PLC (LON:BATS) reported a good set of full year 2018 results at the end of February and there is the hope and expectation that in first-quarter trading update, due on Wednesday, will again be the new generation of tobacco products, e-cigarettes that will drive sales.

Last year sales of these products rose by 95% so investors will be keen to see if the near doubling of sales for the FTSE 100-listed firm continues.

Investors will also expect an update on BAT’s appeal to a compensation claim amounting up to £6bn in Canada.

Will Boohoo cry tears of joy or sorrow?

Boohoo Group PLC’s (LON:BOO) full-year figures at the end of April beat expectations with revenue and profit rising sharply as it continued to benefit from the growing shift to online shopping.

The online fashion retailer said in the results that trading in the first few weeks of the new financial year had been “encouraging”.

For the year ahead, it forecast revenue growth of 25% to 30% and an adjusted underlying earnings (EBITDA) margin of around 10%.

Investors will be hoping for more strong figures from Boohoo when it posts a trading update on Wednesday.

They will also be interested in any updated guidance for the year.

Meanwhile, analysts at broker Peel Hunt are expecting sales growth of 43.8% to £264.1mln for the first quarter.

US inflation to fuel Fed rate cut talk

With the UK economic data calendar relatively blank for Wednesday, the markets will instead be turning their attention to the US CPI inflation numbers as talk of a Fed rate hike continues.

Markets.com's Neil Wilson has suggested that the latest prints show US inflation ticking higher, while Joshua Mahony, senior market analyst at spread-better IG, said that in the wake of disappointing jobs data from the US last week, markets have become increasingly sensitive to the figures and were now expecting two interest rate cuts over the Fed’s next three meetings.

The figure will also be noted ahead of the US retail sales figures for May which are expected on Friday.

Significant announcements expected for Wednesday June 12:

Trading update: British American Tobacco PLC (Q1), (LON:BATS), Boohoo Group PLC (LON:BOO), Summit Therapeutics (Q1) (LON:SUMM)

Finals: Enteq Upstream PLC (LON:NTQ), Castings PLC (LON:CGS), Norcros PLC (LON:NXR), Park Group PLC (LON:PARX), Ramsdens Holdings PLC (LON:RFX), Elektron Technologies PLC (LON:EKT)

AGMs: Aminex PLC (LON:AEX)

Economic data: US CPI inflation

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