Home Depot (NYSE: HD) Among Tuesday's Hot Stocks to Watch By Diane Alter
Earnings per share (EPS) are running 10.2% above last year's results, reports S&P Capital IQ.
Roughly 59% of companies in the S&P 500 have beaten earnings estimates, and 60.7% have exceeded revenue forecasts, according to Bespoke Investment Group.
Retailers on average, however, have disappointed.
We'll see if the soft showing from the retail sector continues Tuesday with results from some key industry players. Also reporting earnings today are a leading medical device manufacturer and a small cap electronic component supplier.Tuesday's Hot Stocks to Watch: HD, MDT, and 5 More
Hot Stocks to Watch No. 1: Home Depot Inc. (NYSE: HD) kicks off today's hot-stocks-to-watch list. The world's largest home improvement specialty retailer posts Q2 numbers before the open. Expectations are for HD to report EPS of $1.44, up from $1.24 in the same quarter a year ago. Whisper numbers are for EPS of $1.48. Revenue is projected to come in at $22.52 billion, up 5% year over year (YOY). In Q1, EPS of $0.96 was a solid 15.7% jump YOY, yet was still $0.04 shy of estimates. Still, the company raised its full-year fiscal earnings growth guidance to 17.6% from 16.5%. HD expects FY2014 EPS to come in at $4.42, up from previous forecast of $4.38. Amid a sputtering housing market, HD has benefited as homeowners try sell their homes, or as those spending more time at home, forgoing pricey vacations, spruce up their dwellings. The consensus analyst recommendation on HD is "Buy," according to Zacks Research. Shares are up a modest 2.19% year to date.
Hot Stocks to Watch No. 2: Medtronic Inc. (NYSE: MDT) reports fiscal Q1 earnings Tuesday morning. Analysts expect the medical device manufacturer to report EPS of $0.92, up from $0.88 in the same period a year earlier. Whisper numbers have MDT beating EPS forecasts by a penny. Revenue is expected to come in at $4.25 billion, a 4% YOY increase. Credit Suisse estimates the company's diabetes segment will show strong YOY growth of 10.2%, with a handful of other company segments projected to show growth from the same period a year ago. Medtronic made headlines in June after announcing it would buy Ireland-based Covidien Plc. (NYSE: COV) in a $42.9 billion deal. While both firms touted synergies, the move is lucrative in that it allows MDT to take advantage of Ireland's cut-rate 12.5% corporate tax rate in a tactic called a tax inversion.
Hot Stocks to Watch No. 3: TJX Companies Inc. (NYSE: TJX) posts Q2 numbers before 9:30 a.m. Forecasts have the off-price apparel and home fashion retailer, with stores throughout the United States, Canada, and Europe, reporting EPS of $0.73. The whisper number is for EPS of $0.74. TJX disappointed last quarter with EPS that fell 4.5%. Like its rivals, the Framingham, Mass.-headquartered company has experienced weak store sales over the last several quarters due to tight-fisted consumers stateside and abroad, harsh weather, and unfavorable foreign currency exchanges. Lukewarm sales in Q1 left inventory levels high and are expected to be a drag on Q2. TJX resorted to offering steep discounts to clear out items, which is expected to affect margins. Shares are off a sharp 15.6% year to date.
Hot Stocks to Watch No. 4: Dick's Sporting Goods Inc. (NYSE: DKS) reports Q2 numbers before today's open. Expectations are for the sports and fitness retailer to post Q2 EPS of $0.65, down from $0.71 in the same quarter a year ago. Whisper numbers are for EPS of $0.66. EPS estimates have fallen from $0.82 over the last three months. Revenue is forecast to be up 8% to $1.53 billion. In May last year the Pennsylvania-based retailer revised annual earnings forecast downward by as much as 30%, largely because of missing its projections for golf merchandise sales by $34 million in Q1. Then in late July, Dick's laid off all of the golf pros in its 560 stores nationwide. Shares are down a dismal 25.46% year to date.
Hot Stocks to Watch No. 5: Elizabeth Arden Inc. (Nasdaq: RDEN) is on tap to post fiscal Q4 numbers Tuesday morning. Wall Street expects the beauty products maker to post an EPS loss of $0.29. Shares drew attention in April when South Korean company LG Household & Health Ltd. was mulling a takeover of RDEN as part of its strategy to expand overseas. In June, when the South Korean company lost interest in RDEN stating it wanted to find "a better alternative that will help drive long-term growth in corporate value," shares slumped 17% to $22.18. Investors also appear to have lost interest in RDEN and are seeking value elsewhere. Shares are down a dismal 43% year to date.
Hot Stocks to Watch No. 6: La-Z-Boy Inc. (NYSE: LZB) will report fiscal Q1 earnings after today's close. Expectations are for the furniture giant to post EPS of $0.21. Whisper numbers are for EPS of $0.23. LZB has recently received some positive analyst actions. Late last month, investment firm Stifel Nicolaus said LZB deserves a higher valuation as the profitability of its retail business is improving, while the recent sale of a number of its businesses has enhanced its outlook. Stifel rates the stock "Buy." In June, BB&T Capital Markets boosted its rating on LZB to "Buy."
Hot Stocks to Watch No. 7: Photronics Inc. (Nasdaq: PLAB) reports fiscal Q3 numbers after the close. Forecasts have the manufacturer of photomasks, which are high precision photographic quartz plates containing microscopic images of electronic circuits used in flat panel displays, to post EPS of $0.05. Following weaker-than-expected Q2 results in May, the company presented a positive outlook saying it remains "confident" in its business model. PLAB estimates revenue will grow $80 million annually from its DNP Taiwan joint venture. The company added that it expects the momentum that company has established over the last few years to continue.
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