The drop in AstraZeneca shares on Thursday was more a consequence of a wider market selloff than disappointed with the pharmaceutical giant’s half year report.

The groups revenue surged 18% over the period on a constant exchange rate basis with the oncology, respiratory & immunology unit’s sales surging 22%.

A beat of analysts’ expectations for the period and a measured increase in the dividend will encourage investors. Core operating margins contracted slightly due to the seasonality of some drugs, but shouldn’t be a major concern. There was a notable spend on R&D during the period, which is to be expected given AstraZeneca have set themselves an $80bn annual revenue target.

Further compounding an all-around solid report for Astra, management increased revenue guidance to the mid-teens on a percentage basis from low double digits and increased Core EPS guidance accordingly.

“AstraZeneca’s vital signs are in good shape after the pharmaceutical giant’s mid-year update. The immediate pulse check on financials is encouraging,” said Derren Nathan equity research, Hargreaves Lansdown.

“Strong sales performances of note included cancer and cardiometabolic treatments giving management to raise the interim dividend by 7.5% to $1.00 per share as well as guidance for the current year.

“But perhaps a more important biomarker of Astra’s journey towards its target of $80bn in total revenues by 2030 is its ongoing R&D success where it’s spending nearly $3bn per quarter.

“There are no guarantees of further clinical success or blockbuster drug launches but AstraZeneca has a deep portfolio and an excellent track record of both operational and clinical success.  The shares have had a good run that’s been matched by a sharper focus, as well as some interesting acquisition activity in novel therapeutic areas such as more targeted cancer treatment and rare endocrine (hormonal) diseases.”

Although the Bank of England has yet to cut rates, the impact of peaking interest rates is evident in Lloyds half-year results released on Thursday.

Lloyds is usually the first UK bank to report earnings and tends to be a way marker for investors in terms what to expect from other major UK banks as they report.

Judging by Lloyds’ report released on Thursday, the sector had a reasonable start to 2024, but there is going to be little to get overly excited about.

Increased competition for deposits and mortgages, coupled with the expectations of lower rate weighed on Lloyds earnings and profit before tax slipped to £2.4 billion for the first half 2024 compared to £2.9 billion for the same period last year.

Underlying net interest income dropped 10% £6.3 billion as the key measure of profitability, net interest margin, held up at 2.94%. Lloyds forecast net interest margin of above 290 basis points for the year.

“Net interest margins declined marginally on weaker lending margins driven by competition as well as deposit mix shifts,” said Niklas Kammer, banking expert and Equity Analyst.

“We are yet to see what deposit mix shifts peers will show in the quarter, but the dynamics were well within what we have seen over the recent quarters already.”

The results were, however, slightly ahead of analyst expectations and the losses in Lloyds shares were contained to 3% at the time of writing.

“Lloyd’s affirmation of 2024 and 2026 guidance after a strong set of Q2 results where they beat estimates highlights success in deepening customer relationships. Our experts believe this is driven by galvanising customers through their app and digital channels to deepen average products per customer,” said Max Georgiou, Analyst at Third Bridge.

“Maintaining momentum post H1 earnings will be key, competition for mortgages is heating up with sub  4% mortgages becoming available, Lloyds need to try and drive loyalty through service offerings to try and protect areas such as NIM.”

The group confirmed guidance for the year in what was a steady-as-you-go update from Lloyds, albeit one that had a marginally negative impact on shares.

“In the first six months of 2024, the Group delivered robust financial results with solid income performance and cost discipline alongside strong capital generation,” said Charlie Nunn, Lloyds Chief Executive.

“Indeed, our progress to date enables us to reaffirm 2024 guidance and remain confident in achieving our 2026 strategic objectives and guidance.”

Poor earnings updates from US technology shares and a sharp sell off in French luxury names translated into a soggy start for UK equities as the FTSE 100 began trade deep in the red. Although the index recovered some of the losses as the session progressed, it was unable to turn positive by lunchtime.

Tesla and Google reported earnings overnight with both of the tech giants trading down in the pre-market curtailing demand for risk assets. 

The French CAC started the session down over 1% as luxury brand LVMH plummeted taking the index with it. The negative sentiment from overseas was too much for the FTSE 100, which was trading down 0.05% at the time of writing. 

“The FTSE 100 was lower after disappointing corporate results in the US and a lacklustre session on Wall Street,” said Dan Coatsworth, investment analyst at AJ Bell.

“A volatile US presidential race presents an unhelpful backdrop for markets, with a first reading of US second-quarter GDP and the Federal Reserve’s preferred inflation measure later this week providing some insight into whether the ‘soft landing’ narrative still holds water.

“Weak results from LVMH and Rémy Cointreau suggest the malaise in the luxury goods sector is yet to abate and this puts further pressure on battered British fashion brand Burberry.”

Although concerns from overseas weighed on the index, Wednesday saw many positive stories for FTSE 100 companies.

After a sharp selloff on the back of a downbeat update from its peer, EasyJet shares soared on Wednesday on news the airline’s profit grew in the its third quarter as passenger. In stark contrast to Ryanair’s performance, EasyJet seem to be enjoying the current environment and could even be eating Ryanair’s lunch.

“easyJet’s third-quarter numbers landed a little better than expected. That’s a welcome relief after disappointing numbers from Ryanair earlier this week caused some share price turbulence for UK airlines,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.

“Revenue moved 11% higher in the period as the group’s increased capacity was filled by a growing number of passengers. The group’s striking ability to sell extras to existing passengers also contributed to top-line growth. These include things like extra baggage, legroom, and food and are a great way to grab a larger share of sunseekers’ budgets.”

Reckitt Benckiser was another standout on Wednesday, not because of its share price performance on the day, but because the management is finally doing something about dismal share price performance over the past year by announcing plans to shake up the consumer goods company’s portfolio by disposing of non-core brands to focus on core brands it dubs ‘Powerhouses’.

Alongside plans to reduce its portfolio, Reckitts outlined a target to achieve £1 billion in costs savings which should be welcome news to investors.

The plan was outlined alongside the release of its half-year report which revealed falling operating profits despite volume growth across many of its categories.

“Investors will be happy to see Reckitt streamline the business,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

“Half-year results were solid despite lowering the sales outlook, partly due to extreme weather events impacting the nutrition business. But the real story here is the strategy shift. Selling assets that generated £1.9bn in sales last year is a bold move, but rightsizing is the aim of the game for many consumer goods companies these days. It’s no longer about size at all costs, and it gives Reckitt a chance to refocus.”

Easyjet investors will be delighted Ryanair’s problems are not industry-wide. Easyjet shares sank earlier this week after its peer announced falling profits and said it would cut its fares. Easyjet is experiencing no such problems.

EasyJet has reported a strong performance in its third quarter with headline profit before tax increasing 16% to £236 million as passenger numbers increased by 8% year-on-year, reflecting robust demand absent from Ryanair’s recent update.

Revenue per seat (RPS) also saw a modest increase of 1% year-on-year, aligning with the company’s guidance.

The easyJet holidays division performed exceptionally well, delivering £73 million in profit before tax, up from £49 million in the same quarter last year. This represents a remarkable 49% growth in profitability, accompanied by a 33% increase in passenger numbers for the holiday segment. The success of this division is contributing significantly to the overall positive performance of the company.

“Our strong performance in the quarter has been driven by more customers choosing easyJet for our unrivalled network of destinations and value for money,” said Johan Lundgren, CEO of easyJet.

“This result was achieved despite Easter falling into March this year, demonstrating the continued importance of travel and this means we remain on track to deliver another record-breaking summer, taking us a step closer to our medium term targets.” 

Looking ahead, the airline said it expects to reach a capacity of approximately 100 million seats for FY24. Furthermore, the fourth quarter of 2024 is anticipated to continue the positive trend seen in Q3, with revenue per seat expected to maintain its upward trajectory. Easyjet may well be eating Ryanair’s lunch.

The holiday division is projected to deliver over £180 million in profit before tax, representing more than 48% profit growth year-on-year.

Bookings for the fourth quarter are strong, with 69% of capacity already sold, which is 1 percentage point higher than the same period last year. Additionally, easyJet has 7% more capacity on sale. This translates to 1.5 million more seats sold for the peak summer period compared to the previous year.