Equities Update: Greggs, Carnival, Nike, tech portfolio…

Greggs serves up another impressive quarter despite economic uncertainty

Mark Crouch, market analyst at investment platform eToro, says: “Greggs has thrived in 2024 as total sales grew by 12.7% year to date. Investors will have been licking their lips as shares of Britain’s favourite bakery have gained close to 20% this year while shareholders have also had their fill of cash returns, with Greggs serving up a feast of dividends.

“Despite penny-pinching consumers seeking to alleviate the pressures of higher food prices, Greggs has excelled in what is still a challenging environment, and one that Greggs expect to remain that way into 2025.

“While maintaining value, convenience and most importantly, quality, all of which remain hallmarks of the baker’s business, the food-to-go retailer has also pushed ahead with expansion plans closing in on their target of 3000 stores. The company’s partnerships with Just Eat and Uber Eats means customers are now able to access their favourite Greggs goodies on delivery at nearly half of Greggs stores with that number also set to increase.

“Cooling inflation has undoubtedly helped drive the impressive performance, and so while interest rates are anticipated to fall further next year, investors’ appetite for Greggs is likely to grow.”

Carnival cruises to record revenues

Adam Vettese, market analyst at investment platform eToro, says: “Carnival shareholders should like what they’re reading in today’s update as all the headline numbers read well. Just shy of $8 billion revenue for the third quarter which is a billion up on 2023. Despite being in one of the very worst hit industries by Covid and shares still a vast amount off where they were pre-pandemic, momentum now appears to be on their side with guidance raised another $200m since June.

“Despite high inflation putting pressure on budgets, consumers seem to be able to carve out enough for holidays and cruises are very much in fashion at the moment. Carnival will look to make hay while the sun shines and take advantage of opportunities to increase revenue via higher ticket prices. The question will be how long will cruises be flavour of the week, month or year. In terms of budget, things may be getting easier for households rather than harder as rates come down, but the question remains whether firms like Carnival can keep cruises a top choice for holidays in the longer term.”

Can Nike tighten bootstraps enough to satisfy investors?

Adam Vettese, analyst at investment platform eToro, says: “Global athletic apparel giant Nike is set to report for its fiscal first quarter after the market close on Wall Street today. Its last quarterly report was marred by warnings of revenue softness in China and what it called ‘near-term challenges’. There is little doubt that China’s economy is limping along in comparison to the robust growth of yesteryear, but Nike’s problems go well beyond that region and macroeconomic uncertainty is only part of the story.

“The company has been forced to make something of a U-turn on its direct sales strategy following disappointing sales through its own website, and is only partway through a multi-year franchise rejuvenation.

“Furthermore, this will be the final earnings report under the watch of outgoing CEO John Donahue, who has been at the helm since 2020. Incoming CEO Elliot Hill – a Nike veteran of more than 30 years who is coming out of retirement – will have a tough job on his hands. Although the stock market has responded positively to his return, there have to be some questions – just as with Bob Iger at Disney – over how long-term of an appointment he can be, given he already retired once before.

“The market has ameliorated expectations following the company’s cut to its full year sales guidance, and earnings of $0.53 per share are expected on revenue of $11.65 bn. This would be more than $1 billion lower than the revenue reported a year ago. While the last earnings report came with a promise that Nike was taking action to ‘be more competitive, and to drive sustainable, profitable long term growth’, ultimately investors may have concerns over how long such a turnaround will take.”

eToro partners with ARK Invest to launch portfolio focused on high-growth tech

Trading and investing platform eToro and investment management firm ARK Invest have partnered to launch a technology and innovation focused portfolio on the eToro platform, enabling its users to invest in the companies pioneering the groundbreaking technologies which are shaping our future.

The Smart Portfolio, named ARK-FutureFirst, focuses on investing in innovative companies across technology, healthcare and sustainability, aiming to achieve high growth while addressing critical global challenges.

The ARK-FutureFirst portfolio is fully invested and allocated equally across seven of ARK Invest’s UCITS exchange-traded funds (ETFs), which back innovative companies that are demonstrating potential for significant growth in three areas:

1. Disruptive innovation: including AI, robotics and public blockchains, which are offering transformative potential and exponential growth opportunities;
2. Healthcare innovation: including multiomic sequencing and gene editing, which are transforming healthcare by enabling personalised medicine, early disease detection, and more effective treatments;
3. Sustainability innovation: including renewable energy, energy efficiency, the transition to a sustainable food system, and the circular economy, which are driving significant environmental impact and promoting a more sustainable future.

The full portfolio allocation can be found here.

Cathie Wood, Founder and CEO of Ark Invest said:

“We are thrilled to partner with eToro to launch a new model portfolio centered around three key areas that we believe are poised for transformative growth: Technological Innovation, the Sustainable Revolution, and Healthcare Disruption. 

“As more investors around the world are gaining access to ETFs via the growth of digital platforms, we are excited that this partnership will enable us to introduce some of our best ideas and original strategies at ARK Invest Europe to eToro’s 38 million retail investors.”

James Thomas, Head of European Sales at ARK Invest adds:

“Over the last few months, we’ve been actively working with partners to develop a number of model portfolio solutions tailored to European investors and their desire for access to both innovation and sustainability/impact themes respectively, which reflect each of our two business pillars at ARK Invest Europe under the ‘ARK Invest’ and ‘Rize ETF’ branded sub-suites respectively. We look forward to developing further partnerships with industry leaders, like eToro, who are dedicated to bringing future-focused investment solutions to their customers.”

Gil Shapira, Chief Investment Officer at eToro said:

“We’re excited to partner with ARK Invest to bring this new portfolio to retail investors around the world. The ARK team has built a prestigious reputation for its original research and portfolio management expertise. With the ARK-FutureFirst portfolio, eToro users can seek growth through truly long-term, cross-sector trends that are predicted to not just shift markets but the world for decades to come.”

eToro’s range of Smart Portfolios offer long-term exposure to various market themes. Bundling together several ETFs under a defined methodology, and employing a passive investment approach, they provide long-term investment solutions that offer diversified exposure. Initial investment starts from USD$500 and any investor can access tools and charts to track the portfolio’s performance, while eToro’s social feed will keep them up-to-date on developments in the sector.