Which Stocks Look Ready to Pop and Drop with Earnings Next Week? (DDD, PCLN, HD, FSLR, GRPN)
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, including 3D Systems (DDD), Priceline.com (PCLN), Home Depot (HD), First Solar (FSLR), Target (TGT), Groupon (GRPN), Dollar Tree (DLTR), Splunk (SPLK), Salesforce.com (CRM), Palo Alto Networks (PANW), Deckers Outdoor (DECK), and Monster Beverage (MNST).
Here is just a tiny sample of what BullMarket.com wrote about Home Depot:
Home Depot has beaten analyst EPS estimates six of eight quarters over the past two years, meeting forecasts twice. Over that stretch, the stock has risen the next session five of eight quarters. Seasonally, the stock has risen three times in the last four years. …
Last quarter, Home Depot said its Q3 net income grew by 1.4% to $947 million, or 63 cents a share, from $934 million, or 60 cents a share, a year earlier. Excluding a non-recurring charge related to its prior decision to close seven stores in China, profit equaled 74 cents, which topped the consensus analyst estimate by four cents per share.
Home Depot’s consolidated sales increased by 4.6% to $18.1 billion, which topped the $17.9 billion average estimate.
Comparable-store sales grew by 4.2% on a consolidated basis, which was largely driven by an increase of 4.3% same-store gain at its core U.S. stores.
The value of an average transaction in U.S. stores increased by 2.9% to $54.55 while customer traffic increased by 1.7%. Higher lumber prices accounted for about 70 basis points of the average ticket growth, the company said.
Internationally, Home Depot’s business in Mexico reported its 36th consecutive quarter of positive same-store sales growth. Canada delivered its fourth-straight quarter of positive comps. Home Depot closed the China stores after concluding it couldn’t make its big-box format work profitably in that country as its economy slowed. It will focus instead on specialty formats like paint stores and building its online business in China. It opened two more stores in Mexico during the quarter. …
Outside of earnings, Home Depot has consistently outperformed rival Lowe’s, though we would expect both companies to benefit from the ongoing recovery of the housing market and any Sandy-related bump in sales over the next year or so.
Home Depot is also looking to drive growth in international markets, led by Canada and Mexico as it shifts its focus in China to specialty stores and online operations.
The stock is trading at about 17x the consensus EPS estimate ($4.00) for the fiscal year that ends January 2015. ….
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 Q4 so far were:
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