Equities Update: Tesla, Unilever, Dunelm, Netflix, Foxtons, Halfords…

Tesla earnings – “A very low-energy start to a big tech earnings season”

 
Tesla earnings drain power from the stock; “Tesla followed Netflix’s lead in reporting poor earnings, making it a very low-energy start to big tech earnings season. Demand for the product is holding up well, but the surge in costs will concern investors, leaving aside the growing spat over Elon’s pay packet. But the relatively muted reaction in the stock so far suggests a relatively sanguine view of the outlook for the time being.”
 

Unilever’s results signal resilient consumer demand

Lale Akoner, global market analyst, says: “Unilever delivered stronger-than-expected Q3 sales, signalling resilient consumer demand despite economic headwinds. Underlying sales rose 3.9%, led by a 1.5% volume gain in personal care as North American shoppers continued to favour trusted brands over trading down. The results reflect both disciplined cost management and the payoff from CEO Fernando Fernandez’s sharper focus on core, higher-margin categories.

“For retailers, the rebound in volumes is an encouraging sign that household staples remain a priority for consumers even amid tighter budgets. Unilever’s ongoing €800 million cost-saving plan suggests pricing pressures could ease, potentially stabilizing shelf prices across fast-moving consumer goods. However, the delayed ice cream spinoff underscores ongoing operational complexity. Overall, Unilever’s steady growth trajectory and efficiency push position it well to capture shifting consumer preferences toward reliable, quality everyday brands.”

Dunelm revenue grows but needs to keep momentum

Adam Vettese, Market Analyst at eToro says: “Dunelm’s first quarter update shows the retailer continuing to execute strongly in a tough consumer environment. A 6% rise in revenue to £428 million underlines the ongoing appeal of its value led product mix, while digital now represents around 40% of sales thanks to steady online momentum and an improved app experience. Margins are also edging higher as supply costs ease, a sign of disciplined management and effective pricing control.

“However, growth looks steady rather than spectacular especially when considering any inflationary pressure. Dunelm also remains sensitive to any softening in home discretionary spending as winter pressures build. The company’s reassurance that full-year guidance remains intact is encouraging, though it suggests limited upgrade potential in the near term.

“Shares have come off the back of a fairly good run over the last 6 months which may mean they now offer a dependable income play rather than having a lot more growth left in the tank. The 1200p mark has offered stubborn resistance on a number of occasions. Dunelm continues to stand out as one of the best managed names in UK retail, they are agile, cash generative, and operationally sound. On the other hand, with consumer confidence still fragile, as well as the market being somewhat jittery overall, the shares may consolidate before the next leg higher.”

Rentals are doing the heavy lifting for Foxtons in a market stuck in neutral

Mark Crouch, Market Analyst at eToro says: “Foxtons’ latest update captures the split personality of London property. Third-quarter sales revenue slipped 7%, while lettings rose 5%, underscoring how landlords, not buyers, are keeping the lights on.

“The stand-off between reluctant buyers and stubborn sellers shows no sign of breaking in the capital. Mortgage costs remain high enough to deter risk-taking, while vendors cling to valuations written in a cheaper-money era. Add in fiscal uncertainty ahead of the Budget and a Bank of England still biding its time, and it’s little wonder deals are scarce.

“For now, lettings are doing the heavy lifting. Foxtons is leaning on a buoyant rental market to offset the sales drought, a strategy that works, but only up to a point. The next leg higher for the shares will need more than tenants, it will need transactions, and a London market finally ready to move again.”

Halfords shifts into higher gear

Adam Vettese, market analyst for eToro says: “Halfords has clearly impressed investors this morning, with shares jumping more than 5% after a well-received half year update. The 4.1% like for like sales growth highlights the strength of its motoring services arm, where rising demand for car maintenance continues to offset softer retail sales. The company’s renewed focus on recurring service income through its Autocentres network and mobile vans is accelerating progress under CEO Henry Birch’s leadership.

“While cost pressures and inflationary drag haven’t yet fully eased, reaffirmed guidance and expanding market share in vehicle servicing demonstrate a business moving in the right direction. With the stock still trading well below its pre-pandemic levels, today’s move suggests the market is beginning to recognise Halfords’ transformation from a cyclical retailer into a service-led operator. If profit margins follow revenue momentum in the second half, there’s scope for further upside from here.”

“A rare earnings miss from Netflix”

Netflix delivers poor start to tech earnings – Chris Beauchamp, Chief Market Analyst at IG: “A rare earnings miss from Netflix wasn’t the start to the tech earnings bonanza that many had hoped for. While it was down to a one-off tax charge, the shares had been looking for the right kind of news to launch them out of the sideways trading that has prevailed since early July. The stock will be on watch to see if the growth in revenue will be enough to cause any dip buying in today’s session.”