The Q1 earnings season has so far portrayed strong growth, tracking above other recent periods. Notably, majority of the S&P 500 companies have delivered positive surprises. As per the latest Earnings Outlook of May 10, 446 S&P 500 members have come out with their quarterly results, accounting for 91.9% of the index’s total market capitalization.
The report further suggests that the S&P 500 companies that reported so far delivered 14% higher earnings than the year-ago period, while revenues went up 7.9%. Remarkably, 72.4% and 66.4% of these companies have beaten earnings and revenue estimates, respectively. Total earnings estimates for the S&P 500 companies as a whole are anticipated to improve 12.7%, with revenues increasing 6.2% from the year-ago period.
The performance of the index is not restricted to a single sector. Out of the 16 Zacks sectors, three are expected to witness a decline in earnings this season with Transportation and Autos likely to be the major drags. The Retail-Wholesale sector, which occupies the bottom most position of the Zacks Classified sectors, is anticipated to witness a decline of 1.8% in total earnings while revenues are forecasted to advance 3.3%.
As of May 10, 47.6% of the S&P 500 companies in the Retail-Wholesale segment have reported earnings. Of these, 60% companies have beaten both earnings and revenue estimates. Bearing these factors in mind, let’s see what awaits the following retail stocks when they release quarterly results on May 12.
J. C. Penney Company, Inc. (NYSE:JCP) a department store merchandising and services company is slated to report first-quarter fiscal 2017 results, before the market opens. The company has an Earnings ESP of -9.09%, as the Most Accurate Estimate loss of 24 cents is wider than the Zacks Consensus Estimate of a loss of 22 cents. Further, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Our proven model does not conclusively show that J. C. Penney is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
J.C. Penney Company, Inc. Holding Company Price, Consensus and EPS Surprise
J.C. Penney Company, Inc. Holding Company Price, Consensus and EPS Surprise | J.C. Penney Company, Inc. Holding Company Quote
In the trailing four quarters, J. C. Penney outperformed the Zacks Consensus Estimate by an average of 24%. The company has been focusing on remodeling, renovating and refurbishing stores in order to enhance customer shopping experience. However, the company’s strategic initiative to shut down two distribution facilities as well as nearly 130–140 stores is likely to hurt sales. (Read more: What's in Store for J. C. Penney in Q1 Earnings?)
Now, let’s take a sneak peek at METRO AG (OTC:MTTRY) , anticipated to release second-quarter fiscal 2017 earnings. The company has Zacks Rank #4 (Sell) and an earnings ESP of 0.00%. We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
METRO AG Price, Consensus and EPS Surprise
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J.C. Penney Company, Inc. Holding Company (JCP): Free Stock Analysis Report
METRO AG (MTTRY): Free Stock Analysis Report
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