We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Zacks Analyst Blog Highlights: Walmart, Home Depot, Lowe's and Target
Read MoreHide Full Article
For Immediate Release
Chicago, IL – November 17, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Walmart Inc. (WMT - Free Report) , The Home Depot, Inc. (HD - Free Report) , Lowe's Companies, Inc. (LOW - Free Report) and Target Corporation (TGT - Free Report) .
Here are highlights from Monday’s Analyst Blog:
4 Retail Giants Likely to Gain on Earnings Results This Week
We are in the last leg of the third-quarter 2020 earnings season and overall results have come in better than expected. Market participants are watching the results closely as the quarter has been a mixed one both in terms of economic data and stock market performance. Meanwhile, four retail giants are likely to beat on earnings this week, which may drive their stock prices in the near future.
Retail Sector in Q3
The retail sector grew in the third quarter albeit at a slow rate. Retail sales grew 0.9%, 0.6% and 1.9%, respectively, in July, August and September. Core retail sales (excluding the volatile auto sales) rose 1.3%, 0.5% and 1.6%, respectively, in the months. Notably, core retail sales constitute a major part of the consumer spending component of the U.S. GDP.
The resurgence of coronavirus in the United States significantly dented retail sales. Moreover, the inability of the U.S. Congress to reach a deal on the size and scope of a fresh fiscal stimulus was a major reason for the tepid growth rate.
However, the most important point is that retail sales grew despite the lack of a new trench of stimulus. Meanwhile, in absolute terms, retail sales have reached the pre-pandemic level.
Q3 Earnings Results in Brief
The third-quarter earnings season has started on a positive note although overall earnings are likely to remain negative. As of Nov 13, 463 S&P 500 companies have reported results. Total earnings of these companies are down 9% from the same period last year on 2% lower revenues, with 84.4% beating EPS estimates and 75.8% surpassing revenue estimates.
Meanwhile, for the quarter as a whole, total S&P 500 earnings are expected to decline 8.6% on 1.2% lower revenues. This would mean an improvement over an earnings decline of 22% year over year on 2.9% lower revenues, as projected before the reporting cycle.
This also implies a marked improvement over second-quarter earnings that had plunged 32.3% on 9.2% lower revenues. Notably, first-quarter earnings of companies on the S&P 500 Index were down 13.5% on 1.4% higher revenues. More importantly, earnings expectations for the fourth quarter are gradually improving since July.
Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Walmart operates retail stores, restaurants, discount stores, supermarkets, supercenters, hypermarkets, warehouse clubs, apparel stores, Sam’s Clubs, and NeighborhoodMarkets, as well as the websites, walmart.com and samsclub.com. The Zacks Rank #3 company has an Earnings ESP of +2.79% for third-quarter fiscal 2021 (ended October 2020).
Walmart has an expected earnings growth rate of 8.1% for the current year (ending January 2021). The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 60 days. It has a trailing four-quarter earnings surprise of 9.5%, on average. The company will release its earnings report on Nov 17, before the opening bell.
The Home Depot is the world’s largest home improvement specialty retailer with over 2,200 retail stores across the globe, offering a diverse range of branded and proprietary home improvement items, building materials, lawn and garden products, and related services. The Zacks Rank #3 company has an Earnings ESP of +5.19% for third-quarter of fiscal 2020 (ended October 2020).
The Home Depot has an expected earnings growth rate of 12.3% for the current year (ending January 2021). The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 7 days. It has a trailing four-quarter earnings surprise of 1.3%, on average. The company will release its earnings report on Nov 17, before the opening bell.
Lowe's Companies is one of the world’s leading home improvement retailers, offering services to homeowners, renters and commercial business customers. The Zacks Rank #3 company has an Earnings ESP of +7.78% for the third quarter of fiscal 2020 (ended October 2020).
Lowe's Companies has an expected earnings growth rate of 50.2% for the current year (ending January 2021). The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the last 7 days. It has a trailing four-quarter earnings surprise of 17.2%, on average. The company will release its earnings report on Nov 18, before the opening bell.
Target operates as a general merchandise retailer in the United States. It offers beauty and household essentials, food assortments, including perishables, dry grocery, dairy, and frozen items; and apparel, accessories, home décor products, electronics, toys, seasonal offerings, and other merchandise. The Zacks Rank #2 company has an Earnings ESP of +7.75% for third-quarter fiscal 2020 (ended October 2020).
Target has an expected earnings growth rate of 13.3% for the current year (ending January 2021). The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last 7 days. It has a trailing four-quarter earnings surprise of 37.6%, on average. The company will release earnings report on Nov 18, before the opening bell.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
The Zacks Analyst Blog Highlights: Walmart, Home Depot, Lowe's and Target
For Immediate Release
Chicago, IL – November 17, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Walmart Inc. (WMT - Free Report) , The Home Depot, Inc. (HD - Free Report) , Lowe's Companies, Inc. (LOW - Free Report) and Target Corporation (TGT - Free Report) .
Here are highlights from Monday’s Analyst Blog:
4 Retail Giants Likely to Gain on Earnings Results This Week
We are in the last leg of the third-quarter 2020 earnings season and overall results have come in better than expected. Market participants are watching the results closely as the quarter has been a mixed one both in terms of economic data and stock market performance. Meanwhile, four retail giants are likely to beat on earnings this week, which may drive their stock prices in the near future.
Retail Sector in Q3
The retail sector grew in the third quarter albeit at a slow rate. Retail sales grew 0.9%, 0.6% and 1.9%, respectively, in July, August and September. Core retail sales (excluding the volatile auto sales) rose 1.3%, 0.5% and 1.6%, respectively, in the months. Notably, core retail sales constitute a major part of the consumer spending component of the U.S. GDP.
The resurgence of coronavirus in the United States significantly dented retail sales. Moreover, the inability of the U.S. Congress to reach a deal on the size and scope of a fresh fiscal stimulus was a major reason for the tepid growth rate.
However, the most important point is that retail sales grew despite the lack of a new trench of stimulus. Meanwhile, in absolute terms, retail sales have reached the pre-pandemic level.
Q3 Earnings Results in Brief
The third-quarter earnings season has started on a positive note although overall earnings are likely to remain negative. As of Nov 13, 463 S&P 500 companies have reported results. Total earnings of these companies are down 9% from the same period last year on 2% lower revenues, with 84.4% beating EPS estimates and 75.8% surpassing revenue estimates.
Meanwhile, for the quarter as a whole, total S&P 500 earnings are expected to decline 8.6% on 1.2% lower revenues. This would mean an improvement over an earnings decline of 22% year over year on 2.9% lower revenues, as projected before the reporting cycle.
This also implies a marked improvement over second-quarter earnings that had plunged 32.3% on 9.2% lower revenues. Notably, first-quarter earnings of companies on the S&P 500 Index were down 13.5% on 1.4% higher revenues. More importantly, earnings expectations for the fourth quarter are gradually improving since July.
Stocks in Focus
Four retail behemoths are slated to release earnings results this week. Each of these stocks carries either a Zacks Rank #2 (Buy) or 3 (Hold) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Walmart operates retail stores, restaurants, discount stores, supermarkets, supercenters, hypermarkets, warehouse clubs, apparel stores, Sam’s Clubs, and NeighborhoodMarkets, as well as the websites, walmart.com and samsclub.com. The Zacks Rank #3 company has an Earnings ESP of +2.79% for third-quarter fiscal 2021 (ended October 2020).
Walmart has an expected earnings growth rate of 8.1% for the current year (ending January 2021). The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 60 days. It has a trailing four-quarter earnings surprise of 9.5%, on average. The company will release its earnings report on Nov 17, before the opening bell.
The Home Depot is the world’s largest home improvement specialty retailer with over 2,200 retail stores across the globe, offering a diverse range of branded and proprietary home improvement items, building materials, lawn and garden products, and related services. The Zacks Rank #3 company has an Earnings ESP of +5.19% for third-quarter of fiscal 2020 (ended October 2020).
The Home Depot has an expected earnings growth rate of 12.3% for the current year (ending January 2021). The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 7 days. It has a trailing four-quarter earnings surprise of 1.3%, on average. The company will release its earnings report on Nov 17, before the opening bell.
Lowe's Companies is one of the world’s leading home improvement retailers, offering services to homeowners, renters and commercial business customers. The Zacks Rank #3 company has an Earnings ESP of +7.78% for the third quarter of fiscal 2020 (ended October 2020).
Lowe's Companies has an expected earnings growth rate of 50.2% for the current year (ending January 2021). The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the last 7 days. It has a trailing four-quarter earnings surprise of 17.2%, on average. The company will release its earnings report on Nov 18, before the opening bell.
Target operates as a general merchandise retailer in the United States. It offers beauty and household essentials, food assortments, including perishables, dry grocery, dairy, and frozen items; and apparel, accessories, home décor products, electronics, toys, seasonal offerings, and other merchandise. The Zacks Rank #2 company has an Earnings ESP of +7.75% for third-quarter fiscal 2020 (ended October 2020).
Target has an expected earnings growth rate of 13.3% for the current year (ending January 2021). The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last 7 days. It has a trailing four-quarter earnings surprise of 37.6%, on average. The company will release earnings report on Nov 18, before the opening bell.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.