Reply To: Traders Market Weekly: Robots, Dribbler Enthusiasm and Short Squeezes


Big box earnings reports:

The retail sector is in the spotlight next week with big reports due in from Walmart (WMT) and Target (TGT). Walmart (WMT) will spill numbers on August 16 with analysts forecasting revenue of just under $150B and EPS of $1.60 Ahead of the report, JPMorgan said recent data showed that the retail giant may be benefiting a from a consumer trade-down effect as value shopping increases.

Target (TGT) is scheduled to follow its rival with its report on August 17. Despite an early warning from the retailer in June on margins for the quarter, analysts are still skittish over what may be the next shoe to drop. Morgan Stanley thinks it is possible Target cuts its full-year EBIT margin from the current implied ~5% level to ~4%, while Evercore ISI issued a negative trading call on the stock due to the expectation that the outlook for EPS and margins will rattle investors. Target (TGT) is seen facing more incremental pressure than Walmart (WMT) because it is more heavily levered to discretionary categories and the stock is not snapped up as much as a defensive play. If there is a surprise to the upside for the Minneapolis-based company, it could be based off a positive read on how the back-to-school shopping season has started and the impact of receding gas prices.