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
DX World EXPO, LLC, a Lighthouse Point, Florida-based startup trade show producer and the creator of "DXWorldEXPO® - Digital Transformation Conference & Expo" has announced its executive management team. The team is headed by Levent Selamoglu, who has been named CEO. "Now is the time for a truly global DX event, to bring together the leading minds from the technology world in a conversation about Digital Transformation," he said in making the announcement.
"Space Monkey by Vivent Smart Home is a product that is a distributed cloud-based edge storage network. Vivent Smart Home, our parent company, is a smart home provider that places a lot of hard drives across homes in North America," explained JT Olds, Director of Engineering, and Brandon Crowfeather, Product Manager, at Vivint Smart Home, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Conference Guru has been named “Media Sponsor” of the 22nd International Cloud Expo, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. A valuable conference experience generates new contacts, sales leads, potential strategic partners and potential investors; helps gather competitive intelligence and even provides inspiration for new products and services. Conference Guru works with conference organizers to pass great deals to gre...
DevOps is under attack because developers don’t want to mess with infrastructure. They will happily own their code into production, but want to use platforms instead of raw automation. That’s changing the landscape that we understand as DevOps with both architecture concepts (CloudNative) and process redefinition (SRE). Rob Hirschfeld’s recent work in Kubernetes operations has led to the conclusion that containers and related platforms have changed the way we should be thinking about DevOps and...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, demonstrated how to move beyond today's coding paradigm and shared the must-have mindsets for removing complexity from the develop...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
Companies are harnessing data in ways we once associated with science fiction. Analysts have access to a plethora of visualization and reporting tools, but considering the vast amount of data businesses collect and limitations of CPUs, end users are forced to design their structures and systems with limitations. Until now. As the cloud toolkit to analyze data has evolved, GPUs have stepped in to massively parallel SQL, visualization and machine learning.
The next XaaS is CICDaaS. Why? Because CICD saves developers a huge amount of time. CD is an especially great option for projects that require multiple and frequent contributions to be integrated. But… securing CICD best practices is an emerging, essential, yet little understood practice for DevOps teams and their Cloud Service Providers. The only way to get CICD to work in a highly secure environment takes collaboration, patience and persistence. Building CICD in the cloud requires rigorous ar...
"Evatronix provides design services to companies that need to integrate the IoT technology in their products but they don't necessarily have the expertise, knowledge and design team to do so," explained Adam Morawiec, VP of Business Development at Evatronix, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. In his session at @BigDataExpo, Jack Norris, Senior Vice President, Data and Applications at MapR Technologies, reviewed best practices to ...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
"ZeroStack is a startup in Silicon Valley. We're solving a very interesting problem around bringing public cloud convenience with private cloud control for enterprises and mid-size companies," explained Kamesh Pemmaraju, VP of Product Management at ZeroStack, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Large industrial manufacturing organizations are adopting the agile principles of cloud software companies. The industrial manufacturing development process has not scaled over time. Now that design CAD teams are geographically distributed, centralizing their work is key. With large multi-gigabyte projects, outdated tools have stifled industrial team agility, time-to-market milestones, and impacted P&L stakeholders.
"Akvelon is a software development company and we also provide consultancy services to folks who are looking to scale or accelerate their engineering roadmaps," explained Jeremiah Mothersell, Marketing Manager at Akvelon, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Enterprises are adopting Kubernetes to accelerate the development and the delivery of cloud-native applications. However, sharing a Kubernetes cluster between members of the same team can be challenging. And, sharing clusters across multiple teams is even harder. Kubernetes offers several constructs to help implement segmentation and isolation. However, these primitives can be complex to understand and apply. As a result, it’s becoming common for enterprises to end up with several clusters. Thi...