FTSE 100 today: closes higher as UK inflation surprises; GBP lower, Ithaca report
Investing.com -- Evercore ISI has launched new tactical trading calls on BJ’s Wholesale Club, Target (NYSE:TGT) and Lowe’s (NYSE:LOW) as the retailers prepare to report quarterly earnings.
In a note to clients, the firm said it was “initiating a positive tactical position or TAP on BJ’s ahead of its F2Q earnings release on Friday, 8/22.”
Evercore ISI expects the stock could see a “HSD return on the call, with expectations widely held for a 2Q comp miss and earnings guide softening into the print.”
The analysts believe BJ’s is likely to reiterate its full-year guide, noting that “healthy MFI trends” and tariff-driven inflation could provide a boost.
The firm adds that data suggested sales “are likely to come roughly in line with the Street, and that after a June soft patch demand likely improved in July.”
Evercore ISI also initiated a bullish view on Target ahead of its Aug. 20 report, seeing “the potential for a high single digit to low double digit increase around earnings.”
The note pointed to potential near-term upside to $110-$115, with EPS of about $2.01 viewed as “reasonable” and in line with consensus.
“Our sense from investor discussions is that the bogey for C25 EPS is also near $7,” the analysts said, suggesting room for a relief rally if second-half trends improve.
“In recent days, much has been made of the Target / Ulta partnership ending, yet we believe Target is hunting for new partners and/or opportunities to scale, for example, with Warby Parker (NYSE:WRBY),” concluded Evercore.
In contrast, the firm turned cautious on Lowe’s, saying it was “initiating a negative TAP into the print.”
While second-quarter results are expected in line with guidance, the analysts argued the stock “has gotten ahead of itself” after rallying 15% in a month.
“LOW stock is up 15% over the last month, outperforming both HD and the broader market. We think the move was driven by sales trends that modestly improved, which when combined with the drop in mortgage rates likely prompted some covering,” stated Evercore.
“The reality remains that the Home Improvement backdrop has remained lackluster, particularly on the DIY side where LOW skews towards more than HD.”