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Previewing Earnings for Cisco, Wal-Mart, Nordstrom, The Gap & Others

the BullMarket.com Staff

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 25- to 40-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 still set to report, including Jack in the Box (JACK), Cisco (CSCO), The Gap (GPS), Wal-Mart (WMT), Nordstrom (JWN), and Dick's Sporting Goods (DKS).

Here is just a tiny sample of what BullMarket.com wrote about The Gap:

Gap has beaten analyst EPS estimates seven of eight quarters over the past two years, meeting the consensus once. During that span, the stock has risen the next session four of eight quarters. Seasonally, the stock has risen twice in the last four years.

Last quarter, Gap posted net income of $351 million, or 73 cents per share, for the quarter ended February 2nd, 2013, compared with $218 million, or 44 cents per share, in the same quarter last year.

Analysts had expected a profit of 71 cents per share.

Sales rose 10.5% to $4.73 billion, while same-store sales were up 5%.

North American same-store sales rose 4% for its namesake brand and 3% at Banana Republic. Comparative store sales at Old Navy stores rose 8%, the company said.

Gross margin for the quarter rose 4.8 percentage points to 37.6%.

Gap guided for a per-share profit of $2.52 to $2.60 for the year, compared to the $2.59 consensus estimate at the time. ...

Outside of earnings, we like how CEO Glen Murphy has reengineered Gap's business and made the company's brands relevant again to consumers. A keypart of Murphy's strategy for re-inventing the company has been to shutter many Gap stores, which had become oversaturated in the U.S. market.

The company is clearly back on track and investors have noticed as evidenced by the stock price more than doubling since the start of 2012. The question is whether there is enough fuel in the tank to propel the stock to higher levels.

Longer term, we like its prospects, especially as it grows its Athleta brand, which targets the same active-wear market that Lululemon (LULU) helped pioneer with its yoga and running-themed brand. ...

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 correct calls BullMarket.com made for Q1 so far were:

  • to be bullish on Green Mountain (GMCR) ahead of earnings.
  • to be bearish on Deere (DE) ahead of earnings.
  • to be bullish on Whole Foods (WFM) ahead of earnings.
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