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The Zacks Analyst Blog Highlights Ulta Beauty, Dollar General, Dollar Tree, Hewlett Packard and Chewy
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For Immediate Release
Chicago, IL – August 24, 2022 – 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: Ulta Beauty Inc. (ULTA - Free Report) , Dollar General Corp. (DG - Free Report) , Dollar Tree Inc. (DLTR - Free Report) , Hewlett Packard Enterprise Co. (HPE - Free Report) and Chewy Inc. (CHWY - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Top 5 Stocks Poised to Beat Earnings Estimates This Month
We are in the last leg of the second-quarter 2022 reporting cycle. Market participants have keenly watched this earnings season as it has provided the most descriptive view of U.S. corporate health amid record-high inflation and an extremely hawkish Fed. So far, earnings results have come in better than expected, with no visible sign of an imminent recession.
Here, we have selected five companies that are slated to report earnings results this month. The combination of a favorable Zacks Rank and a possible earnings beat should drive their share prices. These companies are — Ulta Beauty Inc., Dollar General Corp., Dollar Tree Inc., Hewlett Packard Enterprise Co. and Chewy Inc.
Better-Than-Expected Q2 Earnings Results
As of Aug 17, 469 companies within the S&P 500 Index have reported their financial numbers. Total earnings of these companies are up 7.7% year over year on 14.5% higher revenues, with 77.2% beating EPS estimates and 68.4% beating revenue estimates.
Our latest projection is that for the second quarter as a whole, total earnings of the S&P 500 Index will rise 6.7% year over year on 14% higher revenues and net margin compression of 0.86%. These show a notable improvement over 2.1% growth in earnings year over year on 9.7% higher revenues and net margin compression of 0.95% estimated at the beginning of the reporting cycle.
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 their earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Dollar General remains a compelling growth story in the retail space. Thanks to its value-creating initiatives, defensive product mix and real estate growth strategy, DG has the capabilities to gain market share. Its commitment to better pricing, private label offerings, effective inventory management and merchandise initiative should drive sales.
We also remain encouraged by Dollar General’s host of initiatives such as DG Fresh, Fast Track, non-consumables, digitization and private fleet that should yield same-store sales growth and margin expansion. We expect same-store sales to increase 3.5% and 3% in fiscal 2022 and 2023, respectively.
DG has an Earnings ESP of +1.04%. It has an expected earnings growth rate of 13.6% for the current year (ending January 2023). The Zacks Consensus Estimate for current-year earnings improved 0.3% over the last 30 days.
Dollar General recorded earnings surprises in the last four reported quarters, with an average beat of 2.8%. The company is set to release earnings results on Aug 25, before the opening bell.
Dollar Tree has benefited from the completion of the $1.25 multi-price point initiative at the Dollar Tree stores, as well as robust margins, despite the increase in freight costs and SG&A expenses.
Following the robust first-quarter fiscal 2022 performance, DLTR raised its guidance for fiscal 2022 and provided a decent second-quarter view. In first-quarter fiscal 2022, Dollar Tree reported the tenth straight quarter of earnings beat.
DLTR has an Earnings ESP of +1.75%. It has an expected earnings growth rate of 40.7% for the current year (ending January 2023). The Zacks Consensus Estimate for current-year earnings improved 0.1% over the last 7 days.
Dollar Tree recorded earnings surprises in the last four reported quarters, with an average beat of 13.1%. The company is set to release earnings results on Aug 25, before the opening bell.
Ulta Beauty has been benefiting from its omnichannel strength. Also, the skincare category has been gaining from consumers’ rising interest in self-care. ULTA’s solid performance was backed by the strong execution of its strategies and solid guest demand, with the latter gaining from exciting brand launches.
Also, increased in-person activities and travel have been leading to the revival of the beauty category demand. All major categories delivered double-digit comp sales growth. Encouragingly, Ulta Beauty raised its fiscal 2022 view.
ULTA has an Earnings ESP of +4.07%. The Zacks Consensus Estimate for current-year earnings improved 0.5% over the last 7 days. Ulta Beauty recorded earnings surprises in the last four reported quarters, with an average beat of 49.8%. The company is set to release earnings results on Aug 25, after the closing bell.
Hewlett Packard Enterprise is benefiting from strong executions in clearing backlogs and increasing customer acceptance. HPE’s efforts to shift focus to higher margin offerings are aiding its bottom-line results. Additionally, HPE’s target of saving at least $800 million annually by fiscal 2022-end through cost optimization plan is a positive.
Moreover, Hewlett Packard Enterprise’s multi-billion-dollar investment plan across expanding networking capabilities will help diversify business from server and hardware storage markets, and boost margins over the long run.
HPE has an Earnings ESP of +1.05%. It has an expected earnings growth rate of 3.1% for the current year (ending October 2022). Hewlett Packard Enterprise recorded earnings surprises in three out of the last four reported quarters, with an average beat of 7.8%. The company is set to release earnings results on Aug 30, after the closing bell.
Chewy engages in the pure play e-commerce business in the United States. CHWY provides pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its www.chewy.com retail Website, as well as its mobile applications.
CHWY has an Earnings ESP of +1.03%. Chewy recorded earnings surprises in two out of the last four reported quarters, with an average beat of 4.1%. The company is set to release earnings results on Aug 30, after the closing bell.
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
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.
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The Zacks Analyst Blog Highlights Ulta Beauty, Dollar General, Dollar Tree, Hewlett Packard and Chewy
For Immediate Release
Chicago, IL – August 24, 2022 – 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: Ulta Beauty Inc. (ULTA - Free Report) , Dollar General Corp. (DG - Free Report) , Dollar Tree Inc. (DLTR - Free Report) , Hewlett Packard Enterprise Co. (HPE - Free Report) and Chewy Inc. (CHWY - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Top 5 Stocks Poised to Beat Earnings Estimates This Month
We are in the last leg of the second-quarter 2022 reporting cycle. Market participants have keenly watched this earnings season as it has provided the most descriptive view of U.S. corporate health amid record-high inflation and an extremely hawkish Fed. So far, earnings results have come in better than expected, with no visible sign of an imminent recession.
Here, we have selected five companies that are slated to report earnings results this month. The combination of a favorable Zacks Rank and a possible earnings beat should drive their share prices. These companies are — Ulta Beauty Inc., Dollar General Corp., Dollar Tree Inc., Hewlett Packard Enterprise Co. and Chewy Inc.
Better-Than-Expected Q2 Earnings Results
As of Aug 17, 469 companies within the S&P 500 Index have reported their financial numbers. Total earnings of these companies are up 7.7% year over year on 14.5% higher revenues, with 77.2% beating EPS estimates and 68.4% beating revenue estimates.
Our latest projection is that for the second quarter as a whole, total earnings of the S&P 500 Index will rise 6.7% year over year on 14% higher revenues and net margin compression of 0.86%. These show a notable improvement over 2.1% growth in earnings year over year on 9.7% higher revenues and net margin compression of 0.95% estimated at the beginning of the reporting cycle.
Our Top Picks
Five companies are slated to beat earnings estimates this month. Each of these stocks carries a Zacks Rank #2 (Buy) 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 their earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Dollar General remains a compelling growth story in the retail space. Thanks to its value-creating initiatives, defensive product mix and real estate growth strategy, DG has the capabilities to gain market share. Its commitment to better pricing, private label offerings, effective inventory management and merchandise initiative should drive sales.
We also remain encouraged by Dollar General’s host of initiatives such as DG Fresh, Fast Track, non-consumables, digitization and private fleet that should yield same-store sales growth and margin expansion. We expect same-store sales to increase 3.5% and 3% in fiscal 2022 and 2023, respectively.
DG has an Earnings ESP of +1.04%. It has an expected earnings growth rate of 13.6% for the current year (ending January 2023). The Zacks Consensus Estimate for current-year earnings improved 0.3% over the last 30 days.
Dollar General recorded earnings surprises in the last four reported quarters, with an average beat of 2.8%. The company is set to release earnings results on Aug 25, before the opening bell.
Dollar Tree has benefited from the completion of the $1.25 multi-price point initiative at the Dollar Tree stores, as well as robust margins, despite the increase in freight costs and SG&A expenses.
Following the robust first-quarter fiscal 2022 performance, DLTR raised its guidance for fiscal 2022 and provided a decent second-quarter view. In first-quarter fiscal 2022, Dollar Tree reported the tenth straight quarter of earnings beat.
DLTR has an Earnings ESP of +1.75%. It has an expected earnings growth rate of 40.7% for the current year (ending January 2023). The Zacks Consensus Estimate for current-year earnings improved 0.1% over the last 7 days.
Dollar Tree recorded earnings surprises in the last four reported quarters, with an average beat of 13.1%. The company is set to release earnings results on Aug 25, before the opening bell.
Ulta Beauty has been benefiting from its omnichannel strength. Also, the skincare category has been gaining from consumers’ rising interest in self-care. ULTA’s solid performance was backed by the strong execution of its strategies and solid guest demand, with the latter gaining from exciting brand launches.
Also, increased in-person activities and travel have been leading to the revival of the beauty category demand. All major categories delivered double-digit comp sales growth. Encouragingly, Ulta Beauty raised its fiscal 2022 view.
ULTA has an Earnings ESP of +4.07%. The Zacks Consensus Estimate for current-year earnings improved 0.5% over the last 7 days. Ulta Beauty recorded earnings surprises in the last four reported quarters, with an average beat of 49.8%. The company is set to release earnings results on Aug 25, after the closing bell.
Hewlett Packard Enterprise is benefiting from strong executions in clearing backlogs and increasing customer acceptance. HPE’s efforts to shift focus to higher margin offerings are aiding its bottom-line results. Additionally, HPE’s target of saving at least $800 million annually by fiscal 2022-end through cost optimization plan is a positive.
Moreover, Hewlett Packard Enterprise’s multi-billion-dollar investment plan across expanding networking capabilities will help diversify business from server and hardware storage markets, and boost margins over the long run.
HPE has an Earnings ESP of +1.05%. It has an expected earnings growth rate of 3.1% for the current year (ending October 2022). Hewlett Packard Enterprise recorded earnings surprises in three out of the last four reported quarters, with an average beat of 7.8%. The company is set to release earnings results on Aug 30, after the closing bell.
Chewy engages in the pure play e-commerce business in the United States. CHWY provides pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its www.chewy.com retail Website, as well as its mobile applications.
CHWY has an Earnings ESP of +1.03%. Chewy recorded earnings surprises in two out of the last four reported quarters, with an average beat of 4.1%. The company is set to release earnings results on Aug 30, after the closing bell.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
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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.