Morning Briefing: Special Report on Strong US Retail

Morning Briefing: Special Report on Strong US Retail

Morning Briefing: Special Report on Strong US Retail

$WMT, $COST, $AMZN, $LOW, $URBN, $DG, $HD, $DLTR, $JWN

On the world markets: World stocks rose Friday as news of plans for US-China trade talks stoked positive sentiment over their tariff dust up, DJIA finished comfortably above Key resistance at 25,500  expect a pause to refresh and the recovery in Turkey’s Lira fizzled.

Special Report on Strong US Retail

  • Consumers are spending confidently
  • The US economy is strong because the US consumer is strong.

The US economy has been fortress relative strength in Y 2018 Vs other developed economies.  The Q-2 GDP report provided a clear reminder of that understanding and so did Q-2 earnings report from Walmart (NYSE:WMT).

Walmart is the largest retailer in the US where its business recorded $318.5-B in revenue in FY 2018 it is also the world’s largest retailer, having recorded $495.8-B in net sales in FY 2018.

Walmart US comparative  sales increase in Q-2 was driven by an increase in traffic and ticket growth, plus customer traffic increased 2.2% and ticket size increased 2.3%.

Costco (NASDAQ:COST) and Amazon.com (NASDAQ:AMZN) are not even close at $126.2-B and $177.9-B respectively.

Thursday, WMT  hit a high of 100.12/share, they had traded at 109.98 in January.

Into the next 5 years

Wall Street expects some of the brick and mortar retailers to be around and going strong for the next few years.

Analysts in the sector see the following companies offering up double-digit percentage growth in EPS (earnings per share) over the next 5 years, despite slower growth during the past 5 years for some.

Below are the retailer that Wall Street likes, as follows:

Lowe’s Companies Inc. (NYSE:LOW) analysts expect LOW to have 16.0% EPS growth over the next 5 years. Lowe’s is also among companies that could soon see a market cap of more than $100-B. Shares are up more than 5% YTD. The company is will post its FQ-2 results on 22 August.

Urban Outfitters Inc. (NASDAQ:URBN) EPS are expected to see a 15.5% gain in the next 5 years, much better than the 1.0% decline in the past 5 years. The fashion retailer posted record revenue in Q-1, the share price +27% YTD. The earnings release date is on 21 August.

Dollar General Corp. (NYSE:DG) analysts expect that EPS will show a gainer of 15.3% in the next 5 years. The giant discount retailer saw upgrades from both Citigroup and Raymond James recently. DG’s shares are trading 10%+ YTD. The Dollar General report comes on 30 August.

Home Depot Inc.’s (NYSE:HD) analysts see EPS growth at 15.1% over the next 5 years. This giant home improvement store operator has reported its FQ-2 results posting record sales and earnings. The stock is trading just +3% YTD.

Dollar Tree Inc. (NASDAQ:DLTR) analysts expect 13.6% EPS growth in the next five years from DLTR. The giant discount retailer is a Top pick at RBC, and its shares have been upgraded by Atlantic Equities. The stock is trading off 12% YTD, but is moving up in here. The earnings report is due on 30 August.

And Nordstrom Inc. (NYSE:JWN) analysts expect EPS to grow 12.2% in the next 5 years, u[ from the 4.4% decline in the previous 5 years. The share price up 5%+ YTD. The company release EPS at 0.95 Thursday after the bell beating The Street, the stock surged.

As you can see consumers are seen to be confident, and the US economy is strong because the US consumer is strong.

Have a terrific weekend

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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