Welcome!

News Feed Item

The Zacks Analyst Blog Highlights: Macy's, Wal-Mart, Amazon, Best Buy and Target

CHICAGO, Aug. 18, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Macy's (NYSE:M-Free Report), Wal-Mart (NYSE:WMT-Free Report), Amazon (Nasdaq:AMZN-Free Report), Best Buy (NYSE:BBY-Free Report) and Target (NYSE:TGT-Free Report).

Zacks Investment Research, Inc., www.zacks.com

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Friday's Analyst Blog:

Why Retail Sector Woes Continue

Among the sectors within the S&P 500, Retail may wind up underperforming worst this quarter. True, there are many retailers still yet to report earnings (though we do have roughly three-quarters of the entire sector's total market cap within the S&P in the books at this time), but we've seen enough from the sector thus far to understand what's happening in the space.

Whereas in the previous quarter it was simply enough to blame bad "big-box" retail sales on foul winter weather, in Q2 that's now a full season ago, and still we're seeing disappointing results from some of the biggest names in the sector. Here's what Zacks Director of Research Sheraz Mian had to say about this in his most recent Earnings Trends piece:

"Expectations were low to begin with and came down some more as the quarter unfolded. But retailers have been struggling thus far in Q2 to meet even these lowered estimates, with the EPS beat ratios for the sector the lowest in the S&P 500 index at this stage."

What's more: retailers have been consistently guiding lower for Q3, regardless how well they performed in Q2 (or the company's June/July quarter, whichever it may be). Macy's (NYSE:M-Free Report) recently reported earnings that showed the "best-in-class" retailer missing expectations on the bottom line. Wal-Mart (NYSE:WMT-Free Report) beat its consensus earnings estimate. Both lowered guidance for Q3, and their stocks have taken a hit as a result.

With an overall relatively strong Q2 earnings season across most spaces in the S&P 500, what is it that's sandbagging the retailers right now and for the near future? The reasons are twofold, and I'd make the argument both are being caused, at least in part, by just one company: Amazon (Nasdaq:AMZN-Free Report).

Promotional Environment

Retail has existed within a highly promotional environment for quite some time now: from consumers tenderly finding their way back from the economic recession to holiday and back-to-school seasons to "show-rooming" at a retailer with your smartphone, there always appears to be a way to find what you are looking for at a cheaper price. This has, of course, kept prices and thus margins down, with a continued negative trajectory going forward.

Retailers have trained consumers to expect — and wait for — special discounts and other deals on their merchandise. And then being able to comparison-shop as a consumer for even better deals than the promotions offer is helping spiral pressure against costs for retail goods coming up.

Besides which, growth in U.S. household income hasn't kept pace with many costs of goods, including raw materials used in making all sorts of retail products. This keeps the consumer selective about not only how much he or she is willing to pay for something, but whether or not buying that thing at all is even being considered.

Finally, one can clearly see Amazon.com's hand in manipulating price points and hiving off market share from the big-box players with promotions of its own. Plus, Amazon Prime's free shipping and next-day delivery are closing the gap of the satisfying experience one gets at a big-box retail store. And one less trip to the mall is becoming increasingly attractive to many consumers, especially at these completely competitive price points.

Shift to Online

Amazon's presence in the general retail market to the extent that it is also draws in the eCommerce aspect of the Retail space. Wal-Mart and Macy's still sell a small percentage of their merchandise online — though that number is growing, and not just the big-box companies but specialty retailers everywhere — and migrating investment and energy into the eCommerce space can literally be a dislocating experience for a company accustomed to simply finding plenty of suburban square footage and filling their shops with inventory.

Big-box retail in general may have seen its heyday already, in any case. Where it was once the model for successful retail investment, it has been dislodged by online shopping as well as the "neighborhood convenience" model consumers who do still give considerable foot-traffic are starting to prefer. And while big-box players like Best Buy (NYSE:BBY-Free Report) and Target (NYSE:TGT-Free Report) are taking steps toward the emerging realities in the world of retail, there's always plenty of slack and lack of momentum within even well-conducted plans of action.

Macy's (Zacks Rank #3 [Hold]) is still up over 7 1/2% year-to-date, but it's down 4.7% since its quarterly earnings miss and lowered guidance. Wal-Mart (Zacks Rank #3) is down 6.3% since the start of 2014, and Best Buy (Zacks Rank #3) has yet to recover from its precipitous fall back in January of this year. Target's (Zacks Rank #5 [Strong Sell]) struggles continue, down another 1% today. And Amazon's (Zacks Rank #4 [Sell]) sell-off in the last week of July has proven tough to bounce back from.

Thus, as the retail sector lags behind the rest of the sectors of the S&P 500 on the quarterly earnings reports schedule, so does it lag the overall index in performance, even with an economy showing signs of growth — even robust growth in several areas. Finding ways to offset the downward pricing spiral while navigating toward the successful modern shopping experience will be two keys for these retailers to finally see some bounce-back in their share prices.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros.  In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.

Get the full Report on M - FREE

Get the full Report on WMT - FREE

Get the full Report on AMZN - FREE

Get the full Report on BBY - FREE

Get the full Report on TGT - FREE

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

[email protected]

http://www.zacks.com

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Logo - http://photos.prnewswire.com/prnh/20101027/ZIRLOGO

SOURCE Zacks Investment Research, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
While some vendors scramble to create and sell you a fancy solution for monitoring your spanking new Amazon Lambdas, hear how you can do it on the cheap using just built-in Java APIs yourself. By exploiting a little-known fact that Lambdas aren’t exactly single threaded, you can effectively identify hot spots in your serverless code. In his session at 20th Cloud Expo, David Martin, Principal Product Owner at CA Technologies, will give a live demonstration and code walkthrough, showing how to o...
In his keynote at 19th Cloud Expo, Sheng Liang, co-founder and CEO of Rancher Labs, discussed the technological advances and new business opportunities created by the rapid adoption of containers. With the success of Amazon Web Services (AWS) and various open source technologies used to build private clouds, cloud computing has become an essential component of IT strategy. However, users continue to face challenges in implementing clouds, as older technologies evolve and newer ones like Docker c...
SYS-CON Events announced today that Hitachi, the leading provider the Internet of Things and Digital Transformation, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Hitachi Data Systems, a wholly owned subsidiary of Hitachi, Ltd., offers an integrated portfolio of services and solutions that enable digital transformation through enhanced data management, governance, mobility and analytics. We help globa...
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
Cloud Expo, Inc. has announced today that Aruna Ravichandran, vice president of DevOps Product and Solutions Marketing at CA Technologies, has been named co-conference chair of DevOps at Cloud Expo 2017. The @DevOpsSummit at Cloud Expo New York will take place on June 6-8, 2017, at the Javits Center in New York City, New York, and @DevOpsSummit at Cloud Expo Silicon Valley will take place Oct. 31-Nov. 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
@DevOpsSummit at Cloud taking place June 6-8, 2017, at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long developm...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
Translating agile methodology into real-world best practices within the modern software factory has driven widespread DevOps adoption, yet much work remains to expand workflows and tooling across the enterprise. As models evolve from pockets of experimentation into wholescale organizational reinvention, practitioners find themselves challenged to incorporate the culture and architecture necessary to support DevOps at scale. In his session at @DevOpsSummit at 20th Cloud Expo, Anand Akela, Senior...
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
SYS-CON Events announced today that Progress, a global leader in application development, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Enterprises today are rapidly adopting the cloud, while continuing to retain business-critical/sensitive data inside the firewall. This is creating two separate data silos – one inside the firewall and the other outside the firewall. Cloud ISVs oft...
Five years ago development was seen as a dead-end career, now it’s anything but – with an explosion in mobile and IoT initiatives increasing the demand for skilled engineers. But apart from having a ready supply of great coders, what constitutes true ‘DevOps Royalty’? It’ll be the ability to craft resilient architectures, supportability, security everywhere across the software lifecycle. In his keynote at @DevOpsSummit at 20th Cloud Expo, Jeffrey Scheaffer, GM and SVP, Continuous Delivery Busine...
As pervasive as cloud technology is -- and as persuasive as the arguments are for using it -- the cloud has its limits. Some companies will always have security concerns about storing data in the cloud and certain high-transaction applications will always be better suited for on-premises storage. Those statements were among the bottom-line takeaways delivered at Cloud Expo this week, a three day, bi-annual event focused on cloud technologies, adoption and associated challenges.
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
SYS-CON Events announced today that T-Mobile will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. As America's Un-carrier, T-Mobile US, Inc., is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The Company's advanced nationwide 4G LTE network delivers outstanding wireless experiences to 67.4 million customers who are unwilling to compromise on ...