Smiths investors hungry for demerger news as Apple fans queue for new iPhone

News

Compared to the central bank smorgasbord this week Friday’s corporate and macro menu options are limited, with Apple fans salivating over the official launch of the iPhone 11 and Smiths Group PLC (LON:SMIN) investors hungry to hear some updates.


Smiths is in the process of spinning off its struggling medical division into a separate London-listed company.


The demerger is likely to be a key area of focus when the company reports its full-year results on Friday.


The medical business is the largest part of Smiths, representing about a third of revenues last year. But the group has now decided to demerge the business, given its troubles in recent years.


That deal, coupled with improved trading in trading in the oil services and detection businesses, has helped the shares recover since the start of the year.


A pick-up in oil prices has supported the oil services unit while an increase in government spending has boosted the detection arm.


For the full year, investors have priced in a 5% increase in sales and a 7% increase in earnings (EBIT).


Apple on the shelves


The new iPhones will hit the shelves around the world Friday, with lines at the flagship stores are expected to exceed the last two releases.


This is because roughly a third of the 900mln iPhone users globally have not upgraded their smartphones in more than three years and the analysts are modelling that many will upgrade to iPhone 11/iPhone 11 Pro this time around.




Analysts at US broker Wedbush said they now estimate that launch units could exceed 75mln, compared to original Wall Street expectations of around 70mln, given underlying demand especially in China.


Total iPhone 11 sales could exceed 185mln for full-year 2020, Wedbush reckons.


This would represent modest annual growth, “which is major fuel in the tank as Apple looks to further monetize these customers through services”, such as streaming which launches on November 1.


Friday September 20:


Finals: Smiths Group PLC (LON:SMIN)


Interims: Applegreen PLC (LON:APGN)

Leave a Reply

Your email address will not be published. Required fields are marked *