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Zacks Earnings Trends Highlights: Walmart, Target and Foot Locker
Read MoreHide Full Article
For Immediate Release
Chicago, IL – December 5, 2024 – Zacks Director of Research Sheraz Mian says, "Earnings estimates for the period have steadily come down since the quarter got underway, with the current +7.5% growth rate down from +9.8% in early October."
Looking Ahead to Q4 Earnings Season
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
For 2024 Q4, total S&P 500 earnings are currently expected to be up +7.5% from the same period last year on +4.7% higher revenues.
Earnings estimates for the period have steadily come down since the quarter got underway, with the current +7.5% growth rate down from +9.8% in early October.
Q4 earnings are expected to be above the year-earlier level for 9 of the 16 Zacks sectors, with Medical (earnings growth of +16%), Tech (+14.5%), Finance (+10.7%), and Utilities (+9.1%) as the sectors enjoying significant earnings growth.
Q4 earnings are expected to be below the year-earlier level for 7 of the 16 Zack sectors, with the Energy (earnings decline of -20.7%), Aerospace (-17.9%), Conglomerates (-14.3%) as the notable decliners.
Q4 earnings for the ‘Magnificent 7’ group of companies are expected to be up +20.5% from the same period last year on +12.2% higher revenues. Excluding the ‘Mag 7’ contribution, Q4 earnings for the rest of the index would be up only +3.6% (vs. +7.5%).
Mixed Retail Sector Earnings
The Q3 earnings season is now effectively behind us, with the focus lately on Retail sector quarterly releases. Overall, consumer spending trends appear stable, as we noted earlier while discussing Walmart’s (WMT - Free Report) results.
Walmart has benefited from its heavier indexing to groceries and other must-have merchandise that helps draw in consumers. Another catalyst for Walmart’s strong performance in recent quarters has been its ability to gain market share among higher-income consumers. This trend reflects a combination of the company’s efficient digital offerings and its reputation for value.
The stable spending trends in the aggregate notwithstanding, some discretionary spending areas continue to suffer, as we noted while discussing Target’s (TGT - Free Report) results some time back, and is also likely at play in Foot Locker’s (FL - Free Report) weak showing.
In recent days, we have discussed the Retail sector’s earnings scorecard and how the sector’s Q3 results stack up relative to the other recent periods in section 1 of this report.
The Earnings Big Picture
Looking at Q3 as a whole, combining the actual results that have come out with estimates for the still-to-come companies, total earnings for the S&P 500 index are now expected to be up +8.2% from the same period last year on +5.7% higher revenues.
The Q3 earnings growth pace would improve to +10.6% had it not been for the Energy sector drag (decline of -22.9% for Energy). On the other hand, quarterly earnings for the index would be up +2.9% once the Tech sector’s hefty contribution is excluded (earnings growth of +22.0% for the Tech sector).
The quarterly earnings growth pace is expected to improve from next quarter onwards.
For the current period (2024 Q4), total S&P 500 earnings are expected to be up +7.5% on +4.7% higher revenues. Q4 earnings would be up +9.5% had it not been for the Energy sector drag.
Estimates for the period have started coming down since the quarter got underway. Still, the pace and magnitude of negative revisions are less than we had seen in the comparable period of Q3.
The expectation is for double-digit earnings growth in each of the next two years, with the number of sectors enjoying strong growth notably expanding from the narrow base we have been seeing lately.
Tech sector earnings are expected to be up +17.0% in 2025, which would follow the sector’s +19.8% earnings growth in 2024. But even excluding the Tech earnings, S&P 500 earnings would be up +11.0% in 2025, with three of the 16 Zacks sectors expected to enjoy double-digit earnings growth.
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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.
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Zacks Earnings Trends Highlights: Walmart, Target and Foot Locker
For Immediate Release
Chicago, IL – December 5, 2024 – Zacks Director of Research Sheraz Mian says, "Earnings estimates for the period have steadily come down since the quarter got underway, with the current +7.5% growth rate down from +9.8% in early October."
Looking Ahead to Q4 Earnings Season
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
Mixed Retail Sector Earnings
The Q3 earnings season is now effectively behind us, with the focus lately on Retail sector quarterly releases. Overall, consumer spending trends appear stable, as we noted earlier while discussing Walmart’s (WMT - Free Report) results.
Walmart has benefited from its heavier indexing to groceries and other must-have merchandise that helps draw in consumers. Another catalyst for Walmart’s strong performance in recent quarters has been its ability to gain market share among higher-income consumers. This trend reflects a combination of the company’s efficient digital offerings and its reputation for value.
The stable spending trends in the aggregate notwithstanding, some discretionary spending areas continue to suffer, as we noted while discussing Target’s (TGT - Free Report) results some time back, and is also likely at play in Foot Locker’s (FL - Free Report) weak showing.
In recent days, we have discussed the Retail sector’s earnings scorecard and how the sector’s Q3 results stack up relative to the other recent periods in section 1 of this report.
The Earnings Big Picture
Looking at Q3 as a whole, combining the actual results that have come out with estimates for the still-to-come companies, total earnings for the S&P 500 index are now expected to be up +8.2% from the same period last year on +5.7% higher revenues.
The Q3 earnings growth pace would improve to +10.6% had it not been for the Energy sector drag (decline of -22.9% for Energy). On the other hand, quarterly earnings for the index would be up +2.9% once the Tech sector’s hefty contribution is excluded (earnings growth of +22.0% for the Tech sector).
The quarterly earnings growth pace is expected to improve from next quarter onwards.
For the current period (2024 Q4), total S&P 500 earnings are expected to be up +7.5% on +4.7% higher revenues. Q4 earnings would be up +9.5% had it not been for the Energy sector drag.
Estimates for the period have started coming down since the quarter got underway. Still, the pace and magnitude of negative revisions are less than we had seen in the comparable period of Q3.
The expectation is for double-digit earnings growth in each of the next two years, with the number of sectors enjoying strong growth notably expanding from the narrow base we have been seeing lately.
Tech sector earnings are expected to be up +17.0% in 2025, which would follow the sector’s +19.8% earnings growth in 2024. But even excluding the Tech earnings, S&P 500 earnings would be up +11.0% in 2025, with three of the 16 Zacks sectors expected to enjoy double-digit earnings growth.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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.