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4 Retail Names to Watch This Week

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4 Retail Names to Watch This Week

Written By: Gary Ashton | FinScreener

Third-quarter earnings season rolls on this week with some heavy hitters in the US retail sector. Specific names lined up to report on November 19th are Home Depot Inc. (NYSE: HD) and TJX Companies Inc. (NYSE: TJX) followed by Lowe’s Companies Inc. (NYSE: LOW) and Target Corporation (NYSE: TGT) the next day.

Home Depot is the largest of these names with over a $200 billion market capitalization, so investors will be keenly watching its 3Q results to get a sense of the health of the US consumer. Stock performance this year has been impressive, up 37.63% compared to the wider S&P 500 index, which is up 24.32% in the same period.

HD Stock Chart

Analysts estimate Home Depot’s 3Q earnings will come in at $2.52 per share, which have been revised down by 0.8% in the last 90 days but is still a penny higher than reported 3Q earnings last year.

A close rival to Home Depot is Lowe’s Companies, who also report 3Q earnings this week. Lowe’s stock performance has trailed Home Depot this year, up 25.20%, which is more in line with the broader market. Analysts have also revised down Lowe’s 3Q earnings by nearly 3% in the last 90 days to $1.34 per share, which is still an improvement on the same quarter the previous year with earnings per share of $1.04.

Analysts are more optimistic about Target Corporation and have not revised down their $1.17 3Q earnings per share estimate. Target reported earnings of $1.09 in 3Q last year, so analysts anticipate more than a 7% increase this year. The stock price is up more than 40% over the previous 12 months and still appears to have some value with a PE ratio of 17.4x compared to an average PE ratio of the S&P 500 of 29.3x, making Target a better value stock than 64.3% of the companies in the index.

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