For immediate release
Chicago, IL – May 24, 2022 – Zacks.com announces the list of stocks and is featured in the Analyst Blog. Every day Zacks Equity Research analysts discuss the latest news and events affecting stocks and the financial markets. Stocks recently featured in the blog are: Advance Auto Parts Inc. AAP, Best Buy Co. Inc. BBY, AutoZone Inc. AZO, DICK’S Sporting Goods Inc. DKS and Ulta Beauty Inc. ULTA.
Here are the highlights from Monday’s analyst blog:
5 retailers ready to beat their profits this week
The earnings season for the first quarter of 2022 is almost coming to an end this week. Earnings results so far have been better than expected. Companies from almost all major sectors have already reported their financial figures. Retail is an exception, however, as a slew of retailers will be reporting this week.
In recent weeks, several major US retailers have failed to meet earnings estimates and issued disappointing guidance. Rising inflation has led to an unexpected increase in logistics and labor costs. In addition, a portion of Americans are shifting spending from discretionary items to necessary commodities, especially groceries.
Nevertheless, five major retailers will beat their earnings this week, which should push their stock prices up for the foreseeable future. These are – Advance Auto Parts Inc.† Best Buy Co. Inc.† AutoZone Inc.† DICK’S Sporting Goods Inc. and Ulta Beauty Inc.
Strong earnings results in the first quarter so far
On May 18, 467 S&P 500 companies reported earnings results. Year over year, the total revenues of these companies are up 9.6% on 13.9% higher revenues. In addition, 78.4% of these companies beat earnings estimates and 74.7% beat revenue estimates.
For the first quarter, total earnings of the S&P 500 index are currently expected to rise 9.6% year over year, on 13.5% higher revenue. The current estimate witnessed a significant improvement from 4.3% year-over-year profit on 10% higher revenue estimated at the start of the reporting cycle.
Stocks in focus
Five major retailers will report earnings results this week. Each of these stocks has a Zacks Rank #3 (Hold) and has a positive Income ESP† You can see the full list of current Zacks #1 Rank (Strong Buy) stocks here†
Our research shows that for stocks with the combination of a Zacks Rank #3 or better and a positive Earnings ESP, the probability of winning is as high as 70%. These stocks are expected to appreciate in value after their earnings are released. You can discover the best stocks to buy or sell before they are reported with our Income ESP filter.
Advanced Auto Parts supplies auto parts, accessories, batteries and maintenance items for domestic and imported cars, vans, SUVs and light and heavy trucks. AAP’s efforts to expand and optimize its footprint by opening new stores, increasing its online presence and strategic partnerships are expected to boost its prospects.
The multi-year deal with Bridgestone for DieHard batteries is intended to support the sales growth of Advance Auto Parts. AAP’s strong balance sheet and commitment to return shareholder capital are commendable.
Advance Auto Parts has a profit ESP of +4.91%. It has forecast earnings growth of 14.5% for the current year. The Zacks Consensus Estimate for current year earnings improved 0.1% in the past 7 days.
AAP posted earnings surprises in the last four reported quarters, with an average gain of 11.1%. The company is about to release profit results on May 23, after the closing bell.
Best Buy operates as a retailer of technology products, services and solutions in the United States, Canada and Mexico. BBY has benefited from its omnichannel capabilities and investments in a new membership program, technology, advertising and health strategy. Aside from that, Best Buy’s strong supply chain expertise, flexible store model and ability to quickly switch to digital mode continuously support performance.
Best Buy has a profit ESP of +0.43%. It has forecast earnings growth of 14.5% for the current year. BBY is on release profit results on May 24, before the opening bell.
AutoZone is one of the leading specialty retailers and distributor of auto parts and accessories in the United States. It is active in DIY retail, DIY auto parts and products. AutoZone’s high-quality products, store expansion initiatives and omnichannel efforts to improve the shopping experience for customers are increasing market share.
The proliferation of e-commerce efforts, including next-day home delivery, online purchasing, in-store pickup and orders from commercial customers, are contributing to AutoZone’s revenue growth. The Duralast brand’s solid reputation, competitive pricing and greater store team involvement are supporting growth.
AutoZone has a profit ESP of +2.54%. It has forecast earnings growth of 17.3% for the current year (August 2022). The Zacks Consensus Estimate for current year earnings improved 0.1% in the past 7 days.
AZO posted earnings surprises in the last four reported quarters, with an average gain of 25.9%. The company is about to release profit results on May 24, before the opening bell.
DICK’S Sporting Goods has benefited from its continued focus on developing every possible way to generate more sales. As part of its long-term plan, DKS plans to make significant investments in e-commerce, technology, payroll, team sports and private labels. DICK’S Sporting Goods remains on track to build the best omnichannel experience for athletes by strengthening its retail network and expanding its e-commerce presence.
DICK’S Sporting Goods has a profit ESP of +2.43%. DKS posted earnings surprises in the last four reported quarters, with an average gain of 102.5%. The company is about to release profit results on May 25, before the opening bell.
Ulta Beauty has benefited from its omnichannel strength, thanks to efficient retail and digital operations. ULTA’s skin care category is gaining popularity due to the increasing consumer interest in self-care. Furthermore, management raised its fiscal outlook for 2021.
Ulta Beauty has been seeing market share gains in key beauty categories for a while now, with skin care standing out. The main priority is to strengthen its omnichannel business and explore the potential of both physical and digital facets.
Ulta Beauty has an earnings ESP of +5.16%. The Zacks Consensus Estimate for current year earnings improved 0.1% in the past 7 days. ULTA posted earnings surprises in the last four reported quarters, with an average gain of 67.8%. The company is about to release profit results on May 26, after the closing bell.
Stay tuned for upcoming earnings announcements with the Zacks Income Calendar.
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Past performance is no guarantee of future performance. Inherent in any investment is the potential for loss† This material is provided for informational purposes only and nothing contained herein constitutes an investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is made as to whether an investment is appropriate for any particular investor. It should not be assumed that investments in securities, companies, sectors or markets that have been identified and described have been or will be profitable. All information is current as of the date herein and is subject to change without notice. The views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities. These returns come from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with no transaction fees. These are not the returns of actual stock portfolios. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information on the performance figures presented in this press release.
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