Equities Update: Apple, Shell, Trainline and more…

Apple delivers top tier results with strong global Q1 earnings

Josh Gilbert, analyst at investment platform eToro, says: “Apple showed today why it is magnificent, beating revenue and profit expectations while hiking its dividend and announcing an eyewatering $110 billion share buyback. Many investors had begun to question if Apple still has what it takes to deliver the top growth they have become accustomed to over the years, but Tim Cook turned on the charm today and offered relief to investors. 

“Sales in China were better than feared, still falling by 8%, but less than the 11% expected. The region will remain an ongoing headwind for Apple, with the economy sluggish and competition heating up. Total revenue guidance for Q3 came in the low single digits, not setting the world alight but pointing to some stabilisation in sales.

“It’s crucial for investors to remember that the business has over 2 billion installed devices worldwide, which is the biggest of any company globally, and remains a massive tailwind. This is where its services business remains key, and it proved to be a bright spot during the quarter, delivering 14% growth with $24 billion in revenue year-over-year.

“We’ve seen weakness from Apple over the last 12 months, but it would be naive to think that Apple isn’t laying the foundations in the background, especially with the financial muscle the company possesses. If they can navigate these next couple of tricky quarters and give investors more insight into AI plans and what’s ahead for the new iPhone16, we’ll see a much shinier Apple come the end of 2024.”
 

It’s full steam ahead for Trainline

Mark Crouch, analyst at investment platform eToro, says: “Trainline has this morning delivered a blistering earnings report, carrying last year’s momentum into 2024 at full steam. The online ticketing platform has delivered significant increases in revenues, cash flows and profits in all operating regions, making notable headway in Spain where ticket sales have doubled for two years in a row.

“Trainline remains firmly on track to exceed growth expectations and now boast the title of Europe’s most downloaded rail app. Shareholders will be buoyed by the news of an additional £75m in buybacks, in addition to the £50m already underway.

“Investors will hope the company’s momentum is not derailed following Labour’s recent announcement they plan to renationalise UK railways. At this stage it’s nothing more than a headline grabbing slogan, but uncertainty could lay further down the line should it become a reality.

“The success of Trainline will act as a perfect example of the private sector in action, driving down prices and driving up efficiency. And one that the rest of the industry can surely get on board with.”

Intercontinental kicks off Q1 with revenue rise

Adam Vettese, analyst at investment platform eToro, says: “InterContinental Hotels Group is once again demonstrating the resurgence in global travel demand as they report an uptick in revenue as well as expansion plans. The first quarter of the year certainly isn’t a peak time for tourism but their global presence has allowed them to ride out some seasonal anomalies in some regions with outperformance in others. Japan and Europe were notable bright spots while Easter saw Americas revenue miss the mark, although this may well catch up in Q2. The deal with Novum to double their presence in Germany as well as some signs that the Greater China region is opening back up again represent further opportunities for growth this year.

“Shareholder returns are in full swing with $239m of the expected $1bn to go back completed already in repurchases. The shares have been on a charge in 2024 and accelerated further after February’s outstanding update. Since then, we have seen a dip of just over 10% which could well represent an attractive entry point for some investors.”

Smurfit Kappa tops FTSE gainers

Adam Vettese, analyst at investment platform eToro, says: “There’s a lot of green on the screen today, with the FTSE rising 0.5% and holding above 8150 for most of the day.

“The gainers have been led by packaging company Smurfit Kappa Group, which rose almost 7% by early afternoon, following the earlier release of its first-quarter results that showed a pick up in volumes after an extended slump in 2023. SKG said volume growth was 3% higher in Europe over the quarter, picking up pace from the 1.6% increase seen in Q4 2023.

“Some uplift to sentiment also stems from across the pond, after the Fed found an angle to sugarcoat its ‘higher for longer’ rate message following its latest FOMC meeting. Fed chief Jerome Powell downplayed stagflation concerns and indicated a rate hike was unlikely.

“No rate cut is expected from the MPC next week but, as with the Fed, it may be as much about how they massage expectations that could prove key. Any signs that the committee is laying the groundwork for a cut at either of its summer meetings is likely to be welcomed by investors.”
 

Shell delivers strong Q1 earnings and speeds up share buybacks

Mark Crouch, analyst at investment platform eToro, says: “Oil giant Shell has reported an impressive Q1 earnings, beating analysts’ expectations and increasing the speed of share buybacks.

“Recently dethroned by AstraZeneca as the UK’s most valuable company, Shell investors will have the defiant words of CEO Wael Sawan still ringing in their ears, who believes Shell is significantly undervalued in comparison to US rivals. Shell’s earnings suggest he has a point, with the company’s earnings surpassing those of US rival Chevron, while its valuation is some 25% lower.

“In what would be a bitter blow to the UK economy, the Shell CEO went so far as to indicate the oil giant is ready to pack up and leave the UK FTSE and move across the pond into the accommodating arms of the United States, where fiscal policy is far less severe.

“Whatever the case, crude oil prices are notoriously volatile so producers like Shell must make hay while the sun shines, and shareholders can be satisfied that the company is pursuing every available avenue to return value back to them.”