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Buy Dollar Tree and Best Buy Stock Before Earnings?

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Today’s episode of Full Court Finance at Zacks takes a look at where the market stands halfway through November. The topic then shifts to Best Buy (BBY - Free Report) and Dollar Tree (DLTR - Free Report) ahead of their upcoming earnings releases next week to see if either retail stock might be worth buying.

The market was subdued on Monday, with all three major U.S. indexes closing regular trading hours essentially flat. The brief stagnation followed a solid comeback to end last week, after stocks finally fell in the early part of the week of November 8.  

Wall Street took a breather after it helped run stocks up to new highs as part of a month-long rally that began in early October when things reached oversold technical levels. Investors are trying to decide what to do as prices continue to climb amid supply chain setbacks and difficulty filling millions of open jobs.

Still, stocks are trading near their recent records in the face of October’s 30-year high inflation. The market remains largely bullish for the time being, in part, because higher prices haven’t appeared yet in the S&P 500’s margins outlook for FY22 or 2023 (also read: What's Going on with Earnings in Q4 and Beyond).

Wall Street must now begin to determine if the hot CPI readings will force the Fed to start lifting rates sooner and more quickly than previously projected.

This brings us to a busy stretch of retail earnings that will see nearly all of the U.S. giants report between now and Thanksgiving. These reports and management guidance could provide crucial insights into what to expect from the consumer-driven U.S. economy in the fourth quarter and the early part of 2022.

Best Buy, which lands a Zacks Rank #2 (Buy) right now, reports its third quarter results on Tuesday, November 23. The consumer electronics powerhouse is set to post even stronger revenue growth than it did during its banner, covid-boosted year and its newer subscription service could prove to be a hit.  

Dollar Tree grabs a Zacks Rank #3 (Hold) at the moment and is also set to report its quarterly financial results on November 23. The beaten-down stock soared 14% Monday on reports that activist investors are trying to force the deep-discount retailer to make key changes that likely include revamping its $1 pricing model.  


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