Back to top

Nordstrom, Wal-Mart, Macy's, Target and Amazon are part of Zacks Earnings Preview

Read MoreHide Full Article

For Immediate Release

Chicago, IL – November 19, 2018 – releases the list of companies likely to issue earnings surprises. This week’s list includes Nordstrom (JWN - Free Report) , Wal-Mart (WMT - Free Report) , Macy’s (M - Free Report) , Target (TGT - Free Report) and Amazon (AMZN - Free Report) .

To see more earnings analysis, visit

Every day, makes their Bull Stock of the Day available, free of charge. To see it, click here.

Pullback in Retail Stocks Reflects Elevated Expectations

A big reason for the market’s disappointment with Retail sector earnings reports in recent days is elevated expectations that otherwise solid profitability and same-store sales numbers didn’t quite satisfy. Many of these stocks had done pretty well in the run up to these reports, with the earnings reports providing investors an opportunity to cash in their gains.

The Nordstrom report had legitimate weak spots that justify the sell-off, but the pullback in the Wal-Mart and Macy’s stocks in response to otherwise strong and reassuring results fall in the ‘sell-the-news’ bucket. It is reasonable to expect this behavior to continue with this week’s reports from Target and others.

In terms of the Retail sector scorecard, we now have Q3 results from 63.2% of the retailers in the S&P 500 index. Total earnings for these Retail sector companies, which in addition to including the likes of Macy’s and Wal-Mart also includes online vendors like Amazon and restaurant operators, are up +30.5% on +6.9% higher revenues, with 91.7% beating EPS estimates and 70.8% beating revenue estimates. The comparison charts below put the sector’s Q3 results in a historical context.

With respect to the sector’s growth, Amazon’s blockbuster numbers, particularly on the revenues front, has a big role in the very strong growth picture at this stage, even though the online retail giant’s results disappointed the market.

Q3 earnings growth is still very strong, but the revenue growth rate is a lot lower on an ex-Amazon basis. 

Q3 Earnings Season Scorecard (as of Friday, November 16th)

We now have Q3 results from 464 S&P 500 members or 92.8% of the index’s total membership. Total earnings for these 464 companies are up +25.7% from the same period last year on +8.4% higher revenues, with 78.7% beating EPS estimates and 64% beating revenue estimates.

The proportion of these companies beating both EPS and revenue estimates is 53.7%.

Here are the four takeaways:

·         Q3 earnings growth for these 464 index members at +25.7% is just a shade better than what we had seen from the same group of companies in the preceding period, but represents an improvement over other recent periods.

·         Revenue growth for these 464 index members at +8.4% is tracking below what we  had seen in the preceding period, but represents an improvement over other recent periods.

·         EPS beats at 78.7% is below what we had seen from the same group of 464 index members in the preceding period, but is in-line with historical periods.

·         Revenue beats at 64% is tracking below historical periods. The fact is the proportion of positive revenue surprises is the lowest since the fourth quarter of 2016.

For Q3 as a whole, combining the actual results with estimates for the still to come companies, total earnings are on track to be up +25.3% from the same period last year on +8.3% higher revenues. Earnings growth in Q3 has been steadily going up, now very close the preceding quarter’s +25.4% pace, which was the highest quarterly growth pace in more than 7 years.

As pointed out in this space in recent weeks, estimates for the current period (2018 Q4) have been steadily coming down.

For more details about the overall earnings picture and the Q3 earnings season, please check our weekly Earnings Trends report.

Note: Sheraz Mian manages the Zacks equity research department. He is an acknowledged earnings expert whose commentaries and analyses appear on and in the print and electronic media. His weekly earnings related articles include Earnings Trends and Earnings Preview.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>

Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Click to subscribe to this free newsletter today.

About Zacks is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros.  In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.

Follow us on Twitter:

Join us on Facebook:

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339 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.

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 for information about the performance numbers displayed in this press release.

More from Zacks Press Releases

You May Like

Published in