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 two years, BullMarket.com used the data it has collected to correctly predict investor reactions for nearly two-third of the stocks it's previewed.
In its latest earnings preview, BullMarket.com looks at several popular stocks, including Groupon (GRPN - News), Target (TGT - News), Deere (DE - News), Home Depot (HD - News), Wal-Mart (WMT - News), Intuit (INTU - News), Dollar Tree (DLTR - News), and Salesforce.com (CRM - News).
Here is just a tiny sample of what BullMarket.com wrote about Target:
Target operates general merchandise stores in the United States. The company offers household essentials; electronics and related products; toys; apparel and accessories; home furnishings and decor products; and seasonal merchandise. Its expanded food assortment also includes some perishables and some dry, dairy and frozen items. ...
Last quarter, Target reported net income of $981 million for its fiscal Q4 2012 ended January 28th, equal to $1.45 per share. Its profit was down -5.2% from $1.04 billion, or $1.45 per share, in Q4 2011 when it had less shares.
Adjusted EPS rose 8% to $1.49. Note that many analysts, however, pegged adjusted EPS at $1.43. The consensus was for EPS of $1.40.
Target's total revenue grew by 3.0% to $21.29 billion, which was just above the analyst consensus estimate of $21.21 billion. Retail sales rose 3.3% to $20.94 billion. Sales on a same-store basis grew by 2.2% during the quarter.
The company's retail gross margin declined by -30 basis points to 28.4%. SG&A costs were 18.1% of sales, unchanged from a year ago.
Looking at the credit card segment, average receivables decreased by -7.6% in Q4 to $6.4 billion. Average receivables directly funded by Target decreased by -8.2% to $2.7 billion. Bad debt expense rose to $87 million from $83 million a year ago. The segment profit fell by -35% to $98 million.
The impact of Target's efforts to expand into Canada resulted in about $40 million of start-up costs and depreciation related to the company's expected market entry in 2013. Those costs shaved about -6 cents per share from Target's net income.
Target repurchased and retired approximately 3.1 million of its shares during the quarter at an average cost of $52.35 per share and a total cost of around $161 million.
Looking ahead, Target guided for 2012 adjusted EPS to range from $4.55-$4.75 and GAAP EPS of $4.05-$4.25. Analysts were looking for EPS of $4.27. For Q1, the retailer projected adjusted EPS of 97 cents to $1.07 and GAAP EPS of 88-98 cents. ...
Target has surpassed EPS estimates five of the past eight quarters, missing estimates once and meeting them twice. During that span, the stock has risen the next session five of eight quarters. Seasonally, the stock has risen once in the past four years. ...
Outside of earnings, we continue to believe Target looks tantalizingly cheap, with the stock's U.S. operations trading at 12x the mid-point ($4.55-$4.75) of its FY12 guidance (ending January 2013) and sales improving. Meanwhile, while its move into Canada is currently a drag on earnings, over the long term it's going to be a solid growth driver.
In addition, the company is regaining its fashionably chic image, first with its highly successful limited time Missoni launch and then with a limited time offering from Jason Wu. The Shops at Target expected to debut this month, also for a limited time, will play on this same theme. ...
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.
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