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Discount Retail Stocks' Q4 Earnings on Feb 28: TGT & ROST
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We are in the last leg of the fourth quarter earnings season with focus mainly shifting on to the Retail sector. The earnings scenario in the quarter has been pretty impressive than the past few quarters. Further, investors are impressed as the quarter is all set to break the past quarterly records, marking the best performance in the last two years.
Per the Earnings Preview as of Feb 17, 2017, earnings for the total S&P 500 companies will improve 7.4% from the year-ago period, with total revenue rising 3.9%.
As per the report, out of the 411 S&P 500 companies that have come up with their quarterly numbers, approximately 68.9% posted positive earnings surprises, while 54.7% beat top-line expectations. Total earnings for these index members were up 8% from the year-ago quarter, while revenues increased 4.9%.
The performance of the index is not restricted to a single sector, and of the 16 Zacks sectors, four are expected to witness an earnings decline. Of these, Autos, Transportation and Conglomerates are likely to be major drags.
Discount Retail Stocks form part of the Retail-Wholesale sector. As per the report, total earnings for the sector are expected to decline marginally by 1.2%, while revenues are projected to improve 4.7%. As of Feb 17, 46.5% of the total number of the S&P 500 companies in this sector has reported their results. Out of these, 55.0% companies posted an earnings beat, while 20.0% surpassed revenue estimates.
Let’s see what awaits the following discount retail stocks that are queued up for earnings release on Feb 28.
Target Corporation (TGT - Free Report) , the operator of general merchandise stores, is slated to report fourth-quarter fiscal 2016 results. The company has outperformed in three of the trailing four quarters, with an average beat of 9.9%.
Our proven model does not conclusively show that Target is likely to beat earnings estimates this quarter. This is because 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.
Target Corporation Price, Consensus and EPS Surprise
Target has an Earnings ESP of -0.67%. This is because the Most Accurate estimate of $1.49 stands below the Zacks Consensus Estimate of $1.50. However, the company’s Zacks Rank #3 increases the predictive power of ESP, but we need to have a positive ESP in order to be confident about earnings surprise.
Target reported lackluster performance this holiday season, wherein both the comparable-store sales and sales dropped 1.3% and 4.9%, respectively. Management stated that the divestment of pharmacy and clinic businesses as well as sluggish traffic and soft trends witnessed in the beginning of the season, hurt the results. The dismal results compelled management to lower the fourth-quarter and fiscal 2016 outlook.
Nevertheless, Target has undertaken a series of initiatives, such as the development of omni-channel capacities, diversification and localization of assortments, along with emphasis on smaller format stores, all of which is likely to help augment performance in the quarter to be reported. (Read more: Target to Post Q4 Earnings: What's in the Cards?)
Now, let’s see what’s in store for Ross Stores, Inc. (ROST - Free Report) , an off-price retailer of apparel and home accessories, is set to release fourth-quarter fiscal 2016 results. The company has delivered a positive earnings surprise of 10.7% in the third quarter. In fact, Ross Stores has outperformed the Zacks Consensus Estimate by an average of nearly 5% in the trailing four quarters.
Ross Stores, Inc. Price, Consensus and EPS Surprise
Ross Stores has an Earnings ESP of -1.33%. This is because the Most Accurate estimate stands at 74 cents, while the Zacks Consensus Estimate is pegged higher at 75 cents. However, the company carries a Zacks Rank #2. While a favorable Zacks Rank increases the predictive power of ESP, we need to have a positive ESP in order to be confident about earnings surprise. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ross Stores has been gaining on account of the favorable response from its extensive collection of brand bargains as well as effective cost management. Further, we remain impressed with the company’s merchandise organization initiatives as well as its ability to run the business with leaner inventory levels. However, challenges related to strong comparisons, amid macroeconomic uncertainty and a volatile retail landscape are expected to hurt fourth-quarter results. (Read more: Can Ross Stores Spring a Surprise in Q4 Earnings?)
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Discount Retail Stocks' Q4 Earnings on Feb 28: TGT & ROST
We are in the last leg of the fourth quarter earnings season with focus mainly shifting on to the Retail sector. The earnings scenario in the quarter has been pretty impressive than the past few quarters. Further, investors are impressed as the quarter is all set to break the past quarterly records, marking the best performance in the last two years.
Per the Earnings Preview as of Feb 17, 2017, earnings for the total S&P 500 companies will improve 7.4% from the year-ago period, with total revenue rising 3.9%.
As per the report, out of the 411 S&P 500 companies that have come up with their quarterly numbers, approximately 68.9% posted positive earnings surprises, while 54.7% beat top-line expectations. Total earnings for these index members were up 8% from the year-ago quarter, while revenues increased 4.9%.
The performance of the index is not restricted to a single sector, and of the 16 Zacks sectors, four are expected to witness an earnings decline. Of these, Autos, Transportation and Conglomerates are likely to be major drags.
Discount Retail Stocks form part of the Retail-Wholesale sector. As per the report, total earnings for the sector are expected to decline marginally by 1.2%, while revenues are projected to improve 4.7%. As of Feb 17, 46.5% of the total number of the S&P 500 companies in this sector has reported their results. Out of these, 55.0% companies posted an earnings beat, while 20.0% surpassed revenue estimates.
Let’s see what awaits the following discount retail stocks that are queued up for earnings release on Feb 28.
Target Corporation (TGT - Free Report) , the operator of general merchandise stores, is slated to report fourth-quarter fiscal 2016 results. The company has outperformed in three of the trailing four quarters, with an average beat of 9.9%.
Our proven model does not conclusively show that Target is likely to beat earnings estimates this quarter. This is because 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.
Target Corporation Price, Consensus and EPS Surprise
Target Corporation Price, Consensus and EPS Surprise | Target Corporation Quote
Target has an Earnings ESP of -0.67%. This is because the Most Accurate estimate of $1.49 stands below the Zacks Consensus Estimate of $1.50. However, the company’s Zacks Rank #3 increases the predictive power of ESP, but we need to have a positive ESP in order to be confident about earnings surprise.
Target reported lackluster performance this holiday season, wherein both the comparable-store sales and sales dropped 1.3% and 4.9%, respectively. Management stated that the divestment of pharmacy and clinic businesses as well as sluggish traffic and soft trends witnessed in the beginning of the season, hurt the results. The dismal results compelled management to lower the fourth-quarter and fiscal 2016 outlook.
Nevertheless, Target has undertaken a series of initiatives, such as the development of omni-channel capacities, diversification and localization of assortments, along with emphasis on smaller format stores, all of which is likely to help augment performance in the quarter to be reported. (Read more: Target to Post Q4 Earnings: What's in the Cards?)
Now, let’s see what’s in store for Ross Stores, Inc. (ROST - Free Report) , an off-price retailer of apparel and home accessories, is set to release fourth-quarter fiscal 2016 results. The company has delivered a positive earnings surprise of 10.7% in the third quarter. In fact, Ross Stores has outperformed the Zacks Consensus Estimate by an average of nearly 5% in the trailing four quarters.
Ross Stores, Inc. Price, Consensus and EPS Surprise
Ross Stores, Inc. Price, Consensus and EPS Surprise | Ross Stores, Inc. Quote
Ross Stores has an Earnings ESP of -1.33%. This is because the Most Accurate estimate stands at 74 cents, while the Zacks Consensus Estimate is pegged higher at 75 cents. However, the company carries a Zacks Rank #2. While a favorable Zacks Rank increases the predictive power of ESP, we need to have a positive ESP in order to be confident about earnings surprise. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ross Stores has been gaining on account of the favorable response from its extensive collection of brand bargains as well as effective cost management. Further, we remain impressed with the company’s merchandise organization initiatives as well as its ability to run the business with leaner inventory levels. However, challenges related to strong comparisons, amid macroeconomic uncertainty and a volatile retail landscape are expected to hurt fourth-quarter results. (Read more: Can Ross Stores Spring a Surprise in Q4 Earnings?)
A Full-Blown Technological Breakthrough in the Making
Zacks’ Aggressive Growth Strategist Brian Bolan explores autonomous cars in our latest Special Report, Driverless Cars: Your Roadmap to Mega-Profits Today. In addition to who will be selling them and how the auto industry will be impacted, Brian reveals 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>