Stocks to Watch for Wednesday, Aug. 27, 2014: The S&P 500 closed above 2,000 for the first time Tuesday, driven in part by robust second-quarter earnings.
While the majority of companies have already posted results, a number of key sector players report Wednesday, including a handful of major retailers, a leading luxury jeweler, a spirits giant, the world's largest offshore driller, and more.
Hot Stocks to Watch for Wednesday
Stocks to Watch No. 1: Tiffany & Co. (NYSE: TIF) tops today's hot stocks to watch list. The luxury jeweler is expected to post earnings per share (EPS) of $0.85, up from $0.83 in the same quarter a year ago, when it reports Q2 results before the open. Whisper numbers are for EPS of $0.86. Investment bank Nomura sees a 7% rise in same-store sales and continued improvement in its fashion jewelry line. 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 8% year to date.
Stocks to Watch No. 2: William Sonoma Inc. (NYSE: WSM) reports Q2 results after Wednesday's closing bell. Forecasts have the specialty retailer of home products reporting EPS of $0.53, up from $0.49 in the same quarter a year ago. 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 28.84% since the start of the year.
Stocks to Watch No. 3: Bally Technologies Inc. (NYSE: BYI) reports Q4 numbers after today's close. Analysts are looking for the gaming giant to post EPS of $1.22, up sharply from $0.95 reported in the same quarter a year ago. Earlier this month, Scientific Games Corp. (Nasdaq: SGMS) inked a $3.3 billion deal at $83.30 per share, a 38% premium, to buy its bigger rival Bally as consolidation in the slot machine industry accelerates. Scientific Games is controlled by billionaire investor Ronald Perelman.
Stocks to Watch No. 4: Brown-Forman Corp. (NYSE: BF.B) will post fiscal Q1 results Wednesday morning. Analysts expect one of America's largest spirits and wine companies to reports EPS of $0.72, up from $0.66 in the same quarter a year ago. Whisper numbers are for EPS of $0.73. Likely driving the robust quarter are bourbon sales, which continue to grow thanks to international demand from China and a shifting U.S. culture that currently has a taste for bourbon - aged at least two years in new charred oak barrels. "We are busier than I ever could have imagined," Chris Morris, master distiller at Brown-Forman Corp., producer of Woodford Reserve and Old Forester bourbons, told the Associated Press last week. Indeed, exports of bourbon and Tennessee whiskey surpassed $1 billion for the first time ever in 2013.
Stocks to Watch No. 5: Seadrill Ltd. (NYSE: SDRL) is scheduled to post Q2 results today at a time not specified. Wall Street is looking for the world's largest offshore driller to report EPS of $0.74. Last week, Russia's OAO Rosneft shrugged off U.S. and European Union sanctions, announcing it had signed a deal to swap 150 rigs and cash for a 30% stake in Norway's North Atlantic Drilling, a unit of Seadrill. The $746 million deal strengthens a cooperation agreement that will give the Norwegian business access to the Russian exploration market and install two Rosneft representatives on NADL's seven-person board. The consensus analyst recommendation on Seadrill is "Hold." Shares are off nearly 9% year to date.
Stocks to Watch No. 6: Guess? Inc. (NYSE: GES) is on tap to post Q2 earnings after today's closing bell. Expectations are for the contemporary apparel and accessory retailer to report EPS of $0.29, down sharply from EPS of $0.52 reported in the same quarter a year ago. 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 limping domestic business around. The average analyst recommendation is "Hold," with a median price target of $27.15. At a current $26.14, shares are down 16.64% year to date.
Stocks to Watch No. 7: Brown Shoes Co. Inc. (NYSE: BWS) reports Q2 results before the open. The Street is looking for the global footwear retailer and wholesaler to post EPS of $0.35, up from $0.33 in the same quarter a year ago. Whisper numbers are for EPS of $0.37. Revenue is seen coming in at $637 million. In recent positive analyst action, Buckingham Research initiated coverage on BWS with a "Buy" rating and $33 price target. Analysts at Susquehanna upped their price target on BWS from $30.00 to $33.00. The average analyst recommendation on BWS is "Buy." At $31.62, shares are up 12.37% year to date.
Stocks to Watch No. 8: Chico's FAS Inc. (NYSE: CHS) will report Q2 earnings Wednesday morning. Forecasts are for the specialty retailer of women's private branded fashions to post EPS of $0.26, down a penny from the same quarter a year ago. Whisper numbers have CHS missing by a penny. Last quarter, CHS reported a 10.3% negative surprise. In June, Maxim Group analysts maintained their "Buy" rating on the stock, but trimmed their price target to $19 from $20. The consensus rating on CHS is "Buy" with a median price target of $19.60. Shares are down 15% year to date.
Stocks to Watch No. 9: Donaldson Co. Inc. (NYSE: DCI) reports fiscal Q4 results before today's open. Expectations have the filtration manufacturer to the construction, mining, aerospace, defense, truck, and agriculture industries posting EPS of $0.47, down from $0.48 in the same quarter a year ago. Earlier this month, the Minneapolis, Minn.-headquartered company acquired an Abu Dhabi-based air filter manufacturer, further expanding its global reach in the Middle East. Gabelli & Co rates DCI a "Buy."
Stocks to Watch No. 10: Lannett Co. Inc. (NYSE: LCI) reports fiscal Q4 results after today's close. Projections have the leading generic drug company posting EPS of $0.54, up sharply from $0.12 reported in the same quarter a year ago. Whisper numbers are even more bullish, with EPS of $0.64. Net sales are expected to come in at $81 million, up handsomely from $40.2 million year over year. Analysts rate the stock a "Buy." Shares are up a healthy 17.73% year to date.
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