TSCO, DGE, CRH: Key stocks to watch amid rising businesses prices

Highlights

• Around 65% of businesses surveyed expect to raise prices in the next three months as rising costs continue to affect profits and margins with a sharp surge in inflation, economic slowdown and investment plans looking stagnant.
• The prices are driven by a rise in energy, fuel, raw material, interest rates and labour costs.

More UK businesses are set to raise prices amid a sharp surge in inflation and other issues, like fears of economic slowdown and investment plans looking stagnant, a recent business survey has stated.

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BCC’s quarterly survey published on Sunday flashed warning signals, with around 82% of businesses expecting a rise in prices. Around 65% of businesses surveyed have said that they would raise their prices in the next three months. This is 62% higher than the first quarter of 2022, and 23 percentage points higher as compared to the same period in 2021, according to the British Chambers of Commerce (BCC).

Only 1% of firms are expecting a decrease in prices as concerns over economic slowdown are increasing after inflation hit a 40-year high of 9.1% in May. In the future, about 54% believe that turnover can be increased in the next 12 months.

According to the survey, the prices are driven by a rise in energy, fuel, raw material, interest rates, and labour costs. It also revealed a decrease in the proportion of businesses reporting increased domestic sales, profitability, longer-term turnover confidence, and investment intentions.

Let us see these shortlisted FTSE stocks that may have an impact amid the inflation pressure.

Tesco Plc (LON: TSCO)

The multinational retailer had recently appointed HSBC Bank Plc to repurchase shares worth £150 million as part of its existing £750 million share buyback programme. As of 4 July 2022, the FTSE 100-listed retailer market cap stood at £19,137.57 million. The shares of Tesco Plc have appreciated by 14.45% over the last year, while its YTD return stood at -11.33%. With the Earning Per Share (EPS) of 0.19, its shares were trading at GBX 257.30, up by 0.88% at 08: 10 AM (GMT+1). 

Diageo Plc (LON: DGE)

With its versatile range of beverages, such as Smirnoff vodka, Johnnie Walker Scotch whisky, North-west London-based Diageo Plc has a presence in over 180 countries, with 140 production sites globally. As of 4 July 2022, the FTSE 100-listed company market cap stood at £80,002.77 million. Its shares have appreciated by 1.03% over the last year as of 4 July, while its YTD return stood at -12.88%. With the Earning Per Share (EPS) of 1.14, its shares were trading at GBX 3,516.50, up by 0.26% at 08: 10 AM (GMT+1). 

CRH Plc (LON: CRH)

The multinational building material company is engaged in manufacturing and distributing a diverse range of superior building materials and products. As of 4 July 2022, the FTSE 100-listed company market cap stood at £21,644.45 million. Its shares have depreciated by -21.53% over the last year as of 4 July, while its YTD return stood at -26.33%. With the Earning Per Share (EPS) of 3.29, its shares were trading at GBX 2,875.50, up by 0.93% at 08: 10 AM (GMT+1). 

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.