Stocks to watch for the week of Aug. 25, 2014: Second-quarter earnings season is winding down, with 480 S&P 500 components already reported.
Total earnings for the 480 members that have turned in results are up 8.2% from the same period last year, with 66% beating expectations. Total revenue is up 4.4%, with 61.3% of companies coming in with better-than-expected revenue forecasts.
A number of key industry players are still on tap to report earnings. Stocks to watch this week include a leading electronics retailer, a luxury jeweler, a discount chain merchant, and more...
Stocks to Watch No. 1: Best Buy Co. Inc. (NYSE: BBY) tops our stocks-to-watch list this week. BBY is scheduled to report Q2 results before the open on Tuesday. Expectations are for the leading electronics retailer to post earnings per share (EPS) of $0.31, a penny less than earned in the same period a year ago. Whisper numbers are for EPS of $0.38. Ahead of the release, Piper Jaffray reiterated its "Buy" rating on the stock. Last month, Citigroup upped their rating on BBY to "Buy" and raised their price target to $36 from $31. Morgan Stanley recently set an "Overweight" rating on shares with a $36 price target. Notable bullish call activity has picked up in the days prior to BBY's Q2 report. Shares, at $31.68, are down 20.84% year to date.
Stocks to Watch No. 2: Tiffany & Co. (NYSE: TIF) is set to report Q2 numbers before Wednesday's open. Analysts expect the luxury jewelry retailer to post EPS of $0.85. Whisper numbers are for EPS of $0.86. Tiffany's has been a bright spot in an otherwise dismal first half of the year for retailers. The high-end jeweler posted EPS of $0.97 in Q1, trouncing consensus estimates of $0.77. Sales jumped 13% year over year, and the company provided upbeat full-year guidance. Last week, Sterne Agee reiterated its "Buy" rating on TIF and upped its price target to $108. TIF shares are up 7.78% year to date.
Stocks to Watch No. 3: Abercrombie & Fitch Co. (NYSE: ANF) reports Q2 numbers before Thursday's open. Expectations are for the specialty (and controversial) retailer of casual clothes to post EPS of $0.11. Whisper numbers are for EPS of $0.16. ANF launched a company makeover in January, adding new board members and making stores more inviting. The company, best known as the store that caters to "cool, svelte teens," is now making clothes in larger sizes. It has brightened its signature dark stores and has added black merchandise (once taboo at ANF). Shares got a boost last week after Jefferies said ANF has the "most compelling upside potential" in teen retail. ANF's turnaround efforts appear to be working. Shares are up an attractive 31.12% year to date.
Stocks to Watch No. 4: OSI Systems Inc. (Nasdaq: OSIS) reports fiscal Q4 numbers before Monday's opening bell. Analysts expect the manufacturer of electronic systems and components for homeland security to report EPS of $1.17. The company reported EPS of $0.70 in the prior quarter and said it was positioned to deliver strong Q4 results. A robust quarter, however, could be overshadowed by a study released Friday that revealed the Rapiscan scanner, a full-body X-ray scanner used in U.S. airports from 2009 through 2013 (when they were removed because of privacy concerns) can see private body parts but not guns. "Frankly, we were shocked by what we found," J. Alex Halderman, a professor of computer science at the University of Michigan, said in a statement. "A clever attacker can smuggle contraband past the machines using surprisingly low-tech techniques." Rapiscan is a subsidiary of OSI Systems.
Stocks to Watch No. 5: Analog Devices Inc. (Nasdaq: ADI) will report fiscal Q3 results after Tuesday's close. Wall Street is looking for the manufacturer of systems technology used in the automobile, communications, and industrial industries, to post EPS of $0.63. Whisper numbers are for EPS of $0.64. The Norwood, Mass.-based company pleasantly surprised to the upside in the prior quarter and management said it expected a 1% to 5% revenue increase for Q3. The consensus analyst recommendation on ADI is "Overweight" with a median price target of $57.15. At $52.75, shares are up 3.55% year to date.
Stocks to Watch No. 6: Guess? Inc. (NYSE: GES) is on tap to post Q2 earnings after the close on Wednesday. Expectations are for the contemporary apparel and accessory retailer to report EPS of $0.29. Whisper numbers are for EPS of $0.31. Earlier this month, Wunderlich Securities initiated GES with a "Buy" rating and $31 price target. The firm believes Guess' new management will be able to turn its domestic business around. The average analyst recommendation is "Hold," with a median price target of $27.15. At a current $25.38, shares are down a dismal 18.31% year to date.
Stocks to Watch No. 7: Williams-Sonoma Inc. (NYSE: WSM) is set to report Q2 results after Wednesday's closing bell. Forecasts have the specialty retailer of home products to report EPS of $0.53. Whisper numbers are for EPS of $0.56. Last week, Citigroup named WSM its top retailer for the back-to-school season. The distinction centers on the retailer's Pottery Barn unit, which Citi sees as well-positioned to drive revenue as parents shop for back-to-school furnishings for their children. The average analyst recommendation on WSM is "Overweight." Shares are up 26.25% since the start of the year.
Stocks to Watch No. 8: Big Lots Inc. (NYSE: BIG) will report Q2 results Friday morning. The Street is looking for the closeout retailer to post EPS of $0.30. Whisper numbers are for EPS of $0.32. Big Lots continues to attract customers with expanded offerings. The Columbus, Ohio-headquartered company recently revamped its food department, giving it a fresh look and adding more food brands in order to make shopping more convenient for its customers. Consolidation in the discount store space has helped boost shares 46.36% year to date.
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