Stocks tend to be most volatile around earnings season, when a good or bad report can make or break it. However, a good or even great earnings report doesn't necessarily translate into a huge pop for a stock.
During earnings season, BullMarket.com publishes a comprehensive 20- to 30-page Earnings Preview report for the week ahead each Friday.
Over the past year, BullMarket.com used the data it has collected to correctly predict investor reactions for approximately two-third of the stocks it's previewed.
In its latest earnings preview, BullMarket.com looks at several popular stocks, including Groupon (GRPN), Home Depot (HD), Target (TGT), NetApp (NTAP), Limited Brands (LTD), Deere (DE), Wal-Mart (WMT), Dollar Tree (DLTR), and Cisco (CSCO).
Here is just a tiny sample of what BullMarket.com wrote about Target:
Target has surpassed analyst EPS estimates each quarter over the past two years. Over that stretch, the stock has risen the next session six of eight quarters. Seasonally, the stock has risen three of the last four years.
Last quarter, the retailer delivered net income of $697 million, or $1.04 per share, for the three-month period that ended April 27th. Its results were up by 1.2% from the $689 million, or 99 cents per share, it reported a year ago. The Wall Street consensus GAAP earnings estimate was $1.01 per share.
Its adjusted earnings per share equaled $1.11, which was up 11.5% from the year-earlier quarter, which wasn't impacted by items. The difference between the reported and adjusted results reflected -8 cents per share costs associated with Target's expansion into Canada, offset by a 1 cent per share tax benefit.
The warm winter in North America encouraged shoppers to get out of their homes, which helped drive a 5.9% increase in revenue to $16.87 billion, which was largely in line with expectations.
Sales on a same-store basis rose by 5.3%, which was the company's best quarterly performance since Q3 2005 and was more than a percentage point stronger than the company had forecast heading into the quarter.
Target guided for Q2 adjusted EPS of $1.04 to $1.14 and GAAP EPS of 94 cents to $1.04, which was in line with its previous guidance and brackets the 99 cents per share Street consensus. ...
Outside of earnings, Target has posted pretty consistent solid same-store sales this year, as its customers continue to turn to the store for household necessities. Meanwhile, the retailer has done very well with limited-time designer offerings the past year from the likes of Missoni and Jason Wu, helping bring back its fashionably chic reputation and helping apparel sales. We would also suspect that the company is benefiting in this area from the problems at J.C. Penney (JCP).
Despite a solid performance by the stock this year (up about 20%), we continue to think Target looks undervalued, trading at just above 12.5x next year's consensus. We like the move into Canada as well as how its REDcard Rewards program and limited-time designer partnerships have been resonating with consumers. ...
The full BullMarket.com earnings analysis includes a look at historical earnings data and EPS trends for the companies above and more; examines past investor reactions to earnings in various contexts; gives options activity analysis; reviews previous-quarter earnings; and gives an opinion on both what earnings will look like and how investors will react based on the aforementioned data points.
Just a few of the recent correct calls BullMarket.com made for Q2 were:
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