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Retail Stock Q4 Earnings Slated for Feb 1: TSCO, IAC, CNXN

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The fourth-quarter 2016 earnings season has kick started and the investor community is all busy matching up the estimated earnings of companies with their actual outcomes. The ongoing scenario seems to be on track to attain its best performance in eight quarters. Further, we remain hopeful of earnings growth (on a year-over-year basis) for the second consecutive quarter after five straight quarters of earnings declines.

Per our Earnings Preview report as of Jan 27, 2017, earnings for the total S&P 500 companies will improve 5.2% from the year-ago period, with total revenue rising to 4.0%.

As per the report, out of the 170 S&P 500 companies that have come up with their quarterly numbers, approximately 64.1% posted positive earnings surprises, while 54.7% beat top-line expectations. Total earnings for these index members were up 6.0% from the year-ago quarter, while revenues increased 3.1%.

The performance of the index is not restricted to a single sector, and of the 16 Zacks sectors, five are expected to witness an earnings decline in the fourth quarter. Of these, Auto, Transportation, Oil/Energy and Conglomerates are likely to be a major drag.

Total earnings for the Retail/Wholesale sector are estimated to decline 1.8%, whereas revenues are projected to improve 4.7%. So, let’s see what awaits the following retail stocks that are queued up for fourth-quarter 2016 earnings releases on Feb 1, 2017.

Tractor Supply Company (TSCO - Free Report) , the largest retail farm and ranch store chain in the U.S. has recorded an average beat of 2.6% in the trailing four quarters.

Our proven model shows that Tractor Supply is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Tractor Supply has an Earnings ESP of +1.09% as the Most Accurate estimate is at 93 cents, while the Zacks Consensus Estimate is pegged lower at 92 cents. Moreover, the company carries a Zacks Rank #3, making us reasonably confident of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tractor Supply remains well positioned for growth given its smooth progress on store expansion and technological advancements. The company remains on track with its initiatives, which enable it to generate healthy sales and gain market share. However, the challenging economic backdrop at the agricultural and energy sectors has been taking a toll on consumer spending. This has been weighing on Tractor Supply’s top line performance for a while now. (Read more: Tractor Supply Q4 Earnings: A Beat in the Cards?)

Next, let’s take a sneak peek at IAC/InterActiveCorp (IAC - Free Report) , a leading media and Internet company. The company has missed the Zacks Consensus Estimate by an average of 8.7% in the trailing four quarters.

Our proven model does not conclusively show that IAC/InterActiveCorp is likely to beat earnings estimates this quarter. It has an Earnings ESP of 0.00%, with both the Most Accurate estimate and the Zacks Consensus Estimate pegged at 79 cents. Moreover, it carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Finally, let’s see what’s in store for PC Connection, Inc. (CNXN - Free Report) , a direct marketer of brand-name personal computers and related peripherals, education, government and consumer-end users located primarily in the U.S. The company has outperformed the Zacks Consensus Estimate by an average of 3.6% in the trailing four quarters.

PC Connection has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 51 cents. The company carries a Zacks Rank #3, which increases the predictive power of ESP. However, its ESP of 0.00% makes surprise prediction difficult.

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