Time for retailers to step in to the earnings confessional
Walmart (NYSE: WMT) is scheduled to report earnings before the open this Thursday, November 14 and that will kick off a stretch of big earnings reports from various retailers over a short period of time. Over the course of five trading days we will get reports from Walmart, Home Depot (NYSE: HD), Kohls (NYSE: KSS), TJX Companies (NYSE: TJX), Lowes (NYSE: LOW), and Target (NYSE: TGT).
The six stocks listed are from different segments of the retail industry, but we see in the table below that there are some really good fundamental and technical statistics for the group as a whole. This particular table shows the different categories from Investor's Business Daily and we see lots of green, or positive notations. Two stocks in particular have dark green notations across the board—Home Depot and TJX. The dark green notations mean that the company ranks in the top 20th percentile in that category.
We see that Lowes and Target are green across the board, but they both have SMR ratings that are B's and that is just a notch below the grades of Home Depot and TJX.
The only stock that has any below average ratings is Kohl with a composite reading of only 30 and a Relative Price Strength rating of 26, both in the 21 to 40 percentile range. Walmart has an average EPS rating and an average SMR rating.
The table of Tickeron's Fundamental indicators shows more strong fundamentals for the group, but is also highlights a few more areas of concern than what we saw in the IBD table. Once again we see that Home Depot's numbers are tagged with green highlights across the board, but in this case it is the only stock with such a distinction.
The valuation ratings for Lowes and TJX are concerns, the Profit vs. Risk rating for Kohls is a concern, and Walmart's P/E Growth rating is a concern. The SMR rating from Tickeron for Walmart is also a concern.
Target shows pretty solid results across the board with only its SMR rating being average.
Finally, we have the sentiment table for these six retailers and what we see is that Kohls shows the most pessimism with both the analysts' ratings and the short interest ratio showing more bearish sentiment than the average stock. The most surprising item in the sentiment table is the fact that the analysts' ratings for Home Depot are below average. The overall buy percentage is at 57.6% while the average buy percentage falls in the 65% to 75% range.
The only areas where the sentiment is below average are the short interest ratios for Lowes and Target, but those indicators are only slightly below average.
Overall I would say that the fundamental picture looks pretty strong for the retail sector. The consumer has been the backbone of the economy in the last few years. Corporate spending has been declining in recent years and it has been the consumer that has kept the expansion going.
In addition to all of the earnings reports due out in the next week or so, the Retail Sales report for October is due out on November 15. The September report came in weaker than expected, so investors will be watching the October report a little more closely.
As for the retailers mentioned in this article, Home Depot looks to be on the most solid footing as we head into the reporting period.
Momentum Indicator for HD turns positive, indicating new upward trend
HD saw its Momentum Indicator move above the 0 level on November 08, 2024. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 85 similar instances where the indicator turned positive. In of the 85 cases, the stock moved higher in the following days. The odds of a move higher are at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Moving Average Convergence Divergence (MACD) for HD just turned positive on November 12, 2024. Looking at past instances where HD's MACD turned positive, the stock continued to rise in of 53 cases over the following month. The odds of a continued upward trend are .
HD moved above its 50-day moving average on November 21, 2024 date and that indicates a change from a downward trend to an upward trend.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where HD advanced for three days, in of 356 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 353 cases where HD Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The 10-day RSI Indicator for HD moved out of overbought territory on December 02, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 51 similar instances where the indicator moved out of overbought territory. In of the 51 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 8 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where HD declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
HD broke above its upper Bollinger Band on November 22, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. HD’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 75, placing this stock better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: HD's P/B Ratio (344.828) is very high in comparison to the industry average of (12.239). P/E Ratio (24.357) is within average values for comparable stocks, (36.451). Projected Growth (PEG Ratio) (2.045) is also within normal values, averaging (2.650). Dividend Yield (0.023) settles around the average of (0.034) among similar stocks. P/S Ratio (2.415) is also within normal values, averaging (18.957).
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Fundamental Analysis Ratings
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General Information
a retailer of assortment of building materials and home improvement products
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