Zacks Earnings Preview: Deere & Co., Home Depot, Lowe's, Target, Aeropostale and Gap Inc.

For Immediate Release

Chicago, IL – May 18, 2009 – Zacks.com releases the list of companies likely to issue earnings surprises. This week's list includes Deere & Co. (DE - Analyst Report), Home Depot (HD - Analyst Report), Lowe's (LOW - Snapshot Report), Target (TGT - Snapshot Report), Aeropostale (ARO - Snapshot Report) and Gap Inc. (GAP - Snapshot Report). To see more earnings analysis, visit http://at.zacks.com/?id=3207.

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The Week's Events

First-quarter earnings season nears an end with Deere & Co. (DE - Analyst Report), Home Depot (HD - Analyst Report), Lowe's (LOW - Snapshot Report) and Target (TGT - Snapshot Report) reporting. Joining them will be 15 other members of the S&P 500. In total, we have confirmed reports from 124 companies.

There is not much on the economic calendar, though the minutes from the April Fed meeting will be released on Wednesday afternoon (2 p.m.).

• Tuesday: April building permits and housing starts
• Wednesday: April Fed minutes, weekly crude inventories
• Thursday: Phili Fed survey, April Leading Indicators, weekly initial jobless claims

Fed Chairman Ben Bernanke will deliver a commencement speech at the Boston College Law School on Friday afternoon. Vice Chairman Donald Kohn will speak at a conference about fiscal policy in Princeton, N.J. on Saturday afternoon.

Volume could be light on Friday as traders and fund managers leave early for the holiday weekend. The U.S. markets will be closed on Monday, May 25.

The end of first-quarter earnings season removes a catalyst for the bulls. Given that stocks have rallied for 8 out of 10 weeks, a pullback is overdue and I think it has started.

Companies That Could Issue Positive Earnings Surprises

Despite the recession, Aeropostale (ARO - Snapshot Report) continues to enjoy strong growth. April same-store sales surged 20%, leading the company to hike its first-quarter guidance by 14 cents to 46 cents per share. Brokerage analysts are even more bullish and think the casual clothing retailer could announce profits of 48 cents per share. ARO has topped expectations during 3 out of the last 4 quarters. Aeropostale is scheduled to report on Thursday, Apr 21, after the close of trading.

Though same-store sales continue to fall, Gap Inc. (GAP - Snapshot Report) recently said that first-quarter earnings would top expectations. The company guided for profits of 29 to 30 cents per share, 6 cents more than what brokerage analysts were projecting in early May. (Revisions by 11 of the 19 covering analysts have since pushed the consensus earnings estimate up to 30 cents per share.) GPS has a long track record of topping expectations. GAP is scheduled to report on May 21, after the close of trading.

About one-quarter of the covering brokerage analysts have raised their fourth-quarter estimates on Home Depot (HD - Analyst Report) in recent weeks. The revisions have nudged the consensus earnings estimate a penny higher to 28 cents per share. The most accurate estimate is more bullish at 30 cents per share. The home improvement retailer has topped expectations for 4 consecutive quarters. Home Depot is scheduled to report on Tuesday, May 19, before the start of trading.

Target (TGT - Snapshot Report) recently predicted that its first-quarter earnings would be "well above" the consensus estimate. Brokerage analysts quickly adjusted their models, sending the consensus earnings estimate up to 60 cents per share - an increase of 11 cents from 30 days ago. The most accurate estimate is slightly more bullish at 61 cents per share. This is a riskier call, however, because TGT does not have a good history of topping expectations. Target is scheduled to report on Wednesday, May 20, before the start of trading.

Companies That Could Issue Negative Earnings Surprises

Deere & Co. (DE - Analyst Report) has missed expectations for 4 consecutive quarters. Analysts seem to be bracing for another miss as is evident by the recent 2-cent drop in the consensus earnings estimate. The average fiscal second-quarter forecast now calls for profits of $1.10 per share. The most accurate estimate is more bearish at a $1.07 per share. Deere is scheduled to report on Wednesday, May 20, before the start of trading.

Charles Rotblut, CFA, is the senior market analyst for Zacks.com.

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Contact: Charles Rotblut, CFA
Company: Zacks.com
Phone: 312-265-9352
Email: pr@zacks.com
Visit: www.Zacks.com