Earnings Predictions
for the
Week Beginning November 13, 2017

-- Reports Continue to Steam Along! --

by Ian Harvey

November 13, 2017

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A Look Back At Earnings Predictions for Week Beginning November 06, 2017              

Earnings Results for the Week Beginning November 06, 2017

DATE TRADE GAIN
November 06, 2017 MDLZ NOV 17 2017 40.000 PUT P.P: 127%
November 06, 2017 SWKS NOV 17 2017 115.000 CALL P.P: 76%
November 07, 2017 WB NOV 17 2017 100.000 CALL P.P: 231%
November 08, 2017 SQ NOV 17 2017 37.000 CALL P.P: 54%
November 08, 2017 MNST NOV 17 2017 60.000 CALL P.P: 50%

NOTE: P.P: – Potential Profit


Options Trades to Consider Based on Expected Earnings Reports:

Tuesday, November 14

YY Inc. (ADR)(NASDAQ:YY) – China’s leading social live-streaming platform reports after the market closes. The consensus earnings estimate is $1.54 per share on revenue of $423.29 million but the Earnings Whisper number is $1.59 per share. Consensus estimates are for year-over-year earnings growth of 49.51% with revenue increasing by 35.07%.

Even though the share price has doubled year-to-date, YY remains inexpensive at 13 times this year’s estimated earnings and just 11 times next year’s. Market cap net of cash on the books is about $4.5 billion.

YY’s principal source of revenue is the virtual currency it sells to viewers who then use it to reward their favorite performers or to secure an edge in YY’s online games.

The 10-million amateur channels on its platform attract 117 million monthly average users, with more than half now tuning in via their smartphones. Paying live-streaming users were up 46% year-over-year to a still relatively modest 5.7 million.

With Chinese disposable incomes on a tear once again and consumer confidence the highest in more than 20 years, YY’s near-term prospects is looking good.

Investor sentiment going into the company's earnings release has 85% expecting an earnings beat. Short interest has decreased by 65.5% since the company's last earnings release while the stock has drifted higher by 11.1% from its open following the earnings release to be 41.0% above its 200 day moving average of $63.06.

Overall earnings estimates have been revised higher since the company's last earnings release.

Option trade to consider: Buy the DEC 15 2017 90.000 CALL at approximately $4.80.

TJX Companies Inc. (NYSE:TJX) – reports before the market opens. EPS is seen rising 10% to $1 as revenue grows 7% to $8.89 billion. The Earnings Whisper number is $1.02 per share.

TJX continues to drive growth in both same-store sales and earnings. The HomeGoods concept still has plenty of room to grow its store count as well.

Higher store traffic has been benefiting TJX Companies' comps for the last 33 quarters.  In order to maintain sales momentum in stores, the company has been adhering to aggressive store openings and brand-enhancing initiatives.

In order to support store traffic growth, TJX Companies has been undertaking strategic marketing and advertising campaigns. Its gift-giving initiatives and loyalty card program have aided improved customer engagement. TJX Companies has also been ramping up e-commerce business and plans to add more categories to the online shopping site.

The company is aiming to invest categorically to differentiate e-commerce business from its brick-and-mortar stores.

Investor sentiment going into the company's earnings release has 74% expecting an earnings beat. Overall earnings estimates have been revised higher since the company's last earnings release.

Option trade to consider: Buy the TJX DEC 15 2017 72.500 CALL at approximately $1.20.

Wednesday, November 15

Target Corporation (NYSE:TGT) – reports before the market opens. Wall Street is looking for an 18% EPS drop to 85 cents on a 0.5% sales rise to $16.52 billion. The Earnings Whisper number is $0.87 per share.

The big-box chain has scored with new private-label offerings lately, giving it more exclusivity vs. rivals. Wal-Mart's Thursday report is expected to bring a 1% EPS dip to 97 cents on a more than 2% revenue increase to $121.02 billion. A flurry of recent e-commerce deals have the retail giant positioned as a major online player too. The retailers are each battling Amazon.com (AMZN) and have rolled out free-shipping deals lately as shoppers start looking for holiday gifts.

Overall earnings estimates have been revised higher since the company's last earnings release.

Option trade to consider: Buy the TGT DEC 15 2017 62.500 CALL at approximately $1.50.

Thursday, November 16

Wal-Mart Stores Inc. (NYSE:WMT) – will report before the market opens. The consensus earnings estimate is $0.97 per share on revenue of $121.06 billion but the Earnings Whisper number is $0.99 per share. Walmart has met or surpassed earnings estimates in eight straight quarters, and shares have gained about 30% in 2017.

Thanks to several key acquisitions and investments, Walmart's e-commerce business is gaining serious momentum and should be the focal point of its report.

Wal-Mart reiterated its profit forecast for fiscal 2018, including adjusted earnings per share of $4.30 to $4.40. The midpoint of that range would be up slightly from fiscal 2017's $4.32 in adjusted EPS.

Looking further ahead, Wal-Mart expects EPS growth of 5% in fiscal 2019, driven by a 3% rise in sales and new cost control measures.

Also, Wal-Mart's plans to repurchase $20 billion of its shares -- or about 7% of its current market cap -- over the next two years.

Investor sentiment going into the company's earnings release has 72% expecting an earnings beat. Overall earnings estimates have been revised higher since the company's last earnings release.

Option trade to consider: Buy the WMT DEC 15 2017 92.500 CALL at approximately $1.50.

Friday, November 17

Abercrombie & Fitch Co. (NYSE:ANF) – will report before the market opens. Equities research analysts expect Abercrombie & Fitch Co. to report $0.24 earnings per share (EPS) for the current quarter, with revenue of $758.57 million; down from $779.00 million for the same quarter last year.

Since touching a 17-year low of $8.81 on July 12, Abercrombie & Fitch stock has climbed roughly 44% to its current perch at $12.65.

The majority of analysts, however, remain bearish. Just last week, J.P. Morgan Securities downgraded ANF stock to "underweight" from "neutral," citing the company's history of lackluster same-store sales. By the numbers, all but two of the 14 brokerage firms following the security rate it a "hold" or worse.

Analysts slashed their rating for the specialty retailer's stock to "underweight" from "neutral" with a price target of $10, down from $12.

Also, short interest on ANF stock grew 3.8% during the most recent reporting period to 15.24 million shares. Short interest now represents 22.6% the equity's total available float, or 8.3 times its average pace of trading.

Management sees no silver bullets to sustainable operating profit expansion with top-line degradation coming from a mixture of external factors, ecommerce, poor traffic trends and some self-inflicted wounds, such as a lost connection with the core customer and a stagnant product assortment in need of a refresh.

For the near-term, softer trends will close out the quarter. Looking farther out to the horizon, Abercrombie's six-straight years of negative comparable sales and receding market share put it in an increasingly concerning position.

Abercrombie isn't poised to compete well across categories, as rising costs and the accelerating consolidation of "undifferentiated retail" compound to weigh on the store's operations.

Analysts forecast a 36% decline in Ebitda over the next two years to $121 million by fiscal year 2019 from $190 million in fiscal year 2017.

Option trade to consider: Buy the ANF DEC 15 2017 12.000 PUT at approximately $0.70.


An Important Note: That these suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.

If you wish to receive more options trading recommendations similar to this, which will help boost your portfolio strategy, get on board with the members of Stock Options Made Easy.

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