Earnings Predictions 
for the
Week Beginning November 18, 2019

Profiting From Trading Options!

Compare Exiting Before and After Earnings!

by Ian Harvey

November 17, 2019

EARNINGS PREDICTIONS RESULTS FOR WEEK BEGINNING NOVEMBER 11, 2019

DATE TRADE EXITING BEFORE EARNINGS GAIN/LOSS AFTER EARNINGS
November 12, 2019 OSTK DEC 20 2019 10.000 PUT 12% P.P. 64% P.P.
November 13, 2019 CSCO DEC 20 2019 50.000 CALL 71% P.P. -90%
November 14, 2019 WMT DEC 20 2019 120.000 CALL 50% P.P. 182% P.P.
November 14, 2019 AMAT DEC 20 2019 57.500 CALL 44% P.P. 289% P.P.
November 12, 2019 NVDA DEC 20 2019 215.000 CALL 34% P.P. 3% P.P.

Options Trades to Consider Based on Expected Earnings Reports:

An Extra Options Trade…..

Foot Locker Earnings Report Friday!

Option Trade – Foot Locker, Inc. (NYSE:FL) Calls

Tuesday, November 19, 2019

** OPTION TRADE: Buy the FL JAN 17 2020 45.000 CALL at approximately $3.30.

If you so wish, place a pre-determined sell at $6.60.

Also include a protective stop loss of $1.35.

This information was previously sent in a newsletter under the heading “Foot Locker Earnings Report Friday!”

Foot Locker will report earnings Friday before the market opens. The consensus earnings estimate is for $1.07 per share on revenue of $1.94 billion; but the Whisper number is higher at $1.10 per share.

Foot Locker, Inc. (NYSE:FL), a retailer of shoes and apparel, is confirmed to report earnings at approximately 6:45 AM ET on Friday, November 22, 2019. The consensus earnings estimate is for $1.07 per share on revenue of $1.94 billion; but the Whisper number is higher at $1.10 per share.

Consensus estimates are for year-over-year earnings growth of 12.63% with revenue increasing by 4.30%.

For the last reported quarter, it was expected that Foot Locker would post earnings of $0.66 per share when it actually produced earnings of $0.66, delivering no surprise.

Over the last four quarters, the company has beaten consensus EPS estimates two times.

Short interest has decreased by 22.6% since the company's last earnings release.

Driving Factors to Affect Foot Locker.....

Foot Locker has been gaining from initiatives like managing inventory, investing in digital platforms and improving supply-chain efficiencies, among others. Further, the company’s focus on kids’ and women’s business, shop-in-shop expansion in collaboration with vendors, store banner.com business, and store refurbishment and enhancement of assortments have been yielding results.

The company is also benefiting from its robust brand portfolio, solid e-commerce platform and growing direct-to-consumer operations. Further, the company’s focus on international expansion, particularly in Europe, has been a driver. We note that such upsides have been aiding the company’s comparable store sales (comps). In its last earnings call, management guided a mid-single-digit increase for third-quarter comps.

Analysts’ Opinions.....

Foot Locker has been assigned an average recommendation of “Buy” from the twenty-three analysts that are presently covering the company. Two investment analysts have rated the stock with a sell recommendation, five have given a hold recommendation and fifteen have issued a buy recommendation on the company.

The average twelve-month price target among brokerages that have updated their coverage on the stock in the last year is $55.38.

Susquehanna lifted its rating on Foot Locker to Positive from Neutral on its expectation for improved results for the second half of the fiscal year.

Analyst Sam Poser points to cited improved sales and product allocations of Jordan Retro, Puma, Adidas' Yeezy, Nike's 270 React and other Nike styles.

"Foot Locker is getting better access to key items than it did last year, as other retailers are either getting less or being shut out of some key items," he notes.

Susquehanna hikes its price target to $55 from $39.

Previous Trade…..

Stock Options Made Easy “Earnings Predictions” members entered an options put trade on Foot Locker on August 23, when it last announced its earnings results. The earnings report was a bit dramatic but was great for us by providing a potential profit of 111%.



Tuesday, November 19, 2019


Specialty retailer TJX Companies Inc. (The) (NYSE:TJX), an off-price apparel and home fashions retailer in the United States and across the world, will report earnings before the market opens. The consensus earnings estimate is $0.66 per share on revenue of $10.28 billion; but the Whisper number is a little higher at $0.68 per share.

The company's guidance was for earnings of $0.63 to $0.65 per share. Consensus estimates are for year-over-year earnings growth of 4.76% with revenue increasing by 4.62%.

For the last reported quarter, it was expected that TJX would post earnings of $0.62 per share when it actually produced earnings of $0.62, delivering no surprise.

Over the last four quarters, the company has beaten consensus EPS estimates two times.

The market has remained very bullish, and retail has been one of the strongest sectors. The consumer remains incredibly confident as low unemployment and a strong stock market has confidence and spending high ahead of the upcoming holiday season. While consumers remain upbeat, they are still favoring discount retailers where they can stretch their dollar.

In that channel, TJX is king, with multiple store concepts that span across several categories in the off-price channel. That’s why TJX has been able to report steady and healthy comparable sales growth over the past several years, while many other retailers have struggled.

All of this positive momentum should continue this holiday season. Because of tariffs, consumers may turn to the off-price channel more than ever before. That will lead to huge holiday traffic gains for the likes of TJX, which should lead to strong holiday numbers and a nice jump in TJX stock.

Of the 21 analysts who cover the stock 17 rate it Strong Buy, 0 rates it Buy, 4 rates it Hold, 0 rate it Sell, and 0 rate it Strong Sell.

Option trade to consider: Buy the TJX DEC 20 2019 60.000 CALL at approximately $1.75.

 

Wednesday, November 20, 2019


Target Corporation (NYSE:TGT), the operator of general merchandise stores, will report earnings before the market opens. The consensus earnings estimate is $1.18 per share on revenue of $18.47 billion; but the Whisper number is higher at $1.22 per share.

The company's guidance was for earnings of $1.04 to $1.24 per share. Consensus estimates are for year-over-year earnings growth of 8.26% with revenue increasing by 3.64%.

In the trailing four quarters, the company’s bottom-line has outperformed the Consensus Estimate by 4.6% on average. In the last reported quarter, the company delivered a positive earnings surprise of 13%.

After registering bottom-line improvement of 23.9% in the second quarter, Target is likely to deliver year-over-year growth in the third quarter as well.

TGT has been a strong outperformer over the last 12 months as the company’s ability to finally show material improvements in its online business has Wall Street very bullish on the stock. The company struggled at the onset of the digital age, but investments in its e-commerce business have been paying off, and investments in re-designing its brick-and-mortar locations and improving customer satisfaction has been driving higher sales both online and in-store.

Earnings are up 10.9% per annum over the last five years and Wall Street expects more of the same moving forward with future earnings growth forecast at 9.3% per annum for the next five years.

Positive factors.....

  • Target’s focus on new brands, enhancing omni-channel capacities, remodeling stores and expanding same-day delivery options has been driving the top line. Robust traffic, favorable store comps and a surge in comparable digital sales have been contributing to results.
  • The company has been undertaking rationalization of supply chain with technology and process improvements. The company’s digitization initiative has been paying off quite well. Comparable digital channel sales surged 34% in the second quarter, and added 1.8 percentage points to comparable sales.
  • Target has been able to keep and attract more young consumers, unlike department stores such as Macy’s M, through trendy lines and affordable furniture, home décor, and fashion. This includes the launch of over 20 private-label brands over the last several years, along with various limited-release partnerships with higher-end brands such as Hunter Boot.
  • Along with bigger-ticket items, one of Target’s most important food brands going forward will be its new Good & Gather, which it announced right before its second quarter release. Target called the new offering its “flagship brand” and it will over time phase out Target's existing brands such as Archer Farms.
  • Target announced in September that its board authorized a new $5 billion share repurchase program, which will begin after the completion of the current $5 billion program. Target has also committed to transforming its supply chain and providing “industry-leading pay and benefits combined with enhanced training and career growth opportunities.”
  • Short interest has decreased by 42.9% and overall earnings estimates have been revised higher since the company's last earnings release.

Of the 20 analysts who cover the stock 13 rate it Strong Buy and 7 rate it Hold.

Option trade to consider: Buy the TGT DEC 20 2019 115.000 CALL at approximately $3.60.



Thursday, November 21, 2019

Specialty retailer Macy's Inc. (NYSE:M) is expected to report its earnings before the market opens. The consensus earnings estimate is for $0.01 per share on revenue of $5.31 billion; but the Whisper number is higher at $0.04 per share.

Consensus estimates are for earnings to decline year-over-year by 96.30% with revenue decreasing by 1.74%.

Negative factors.....

The issues plaguing Macy’s are longstanding and not new.

  • Macy’s downturn is one that helped spark broader fears that traditional brick and mortar retail’s days were numbered in the Amazon era. And Macy’s particularly has not been able to find success or inspire much Wall Street confidence.
  • Macy’s has tried to adapt to the e-commerce focused retail age through its omnichannel offerings that integrate its brick-and-mortar infrastructure with digital. The company, which also owns Bloomingdale’s and Bluemercury, has spent on various initiatives, with varying success. But in a retail age where brands can pop up online overnight and can find success on platforms such as Instagram FB, Macy’s struggles have become increasingly amplified.
  • The challenge for Macy’s is to hold onto their revenues and margins as it brings itsoperations in-line with the changed ground realities. But transitions are never smooth, easy and cheap. It is the inherent difficulties of this transition that explains the performance challenge facing Macy’s.
  • Macy’s full revenue fell three years in a row until it posted a marginal climb in 2018. But as the American mall fades further it is unclear when or if the historic department store will return to growth or glory.
  • Macy’s stock began to tumble in the summer of 2015 and despite a brief comeback, it has taken a nosedive ever since. M shares have fallen over 72% in the past five years, as the broader retail industry climbed 80%. And the stock is down 50% over the last 12 months.
  • Short interest has increased by 106.9% and overall earnings estimates have been revised lower since the company's last earnings release.

 Option trade to consider: Buy the M DEC 20 2019 17.000 PUT at approximately $1.10.


The data analytics software provider Splunk Inc. (NASDAQ:SPLK) that delivers usable insights into digital systems -- everything from websites and apps to servers and mobile devices, will report earnings after the market closes. The consensus earnings estimate is $0.54 per share on revenue of $603.41 million; but the Whisper number is higher at $0.61 per share.

The company's guidance was for revenue of approximately $600.00 million. Consensus estimates are for year-over-year earnings growth of 63.64% with revenue increasing by 25.45%.

For the last reported quarter, it was expected that Splunk would post earnings of $0.12 per share when it actually produced earnings of $0.30, delivering a surprise of +150%.

Over the last four quarters, the company has beaten consensus EPS estimates four times.

SPLK has struggled for most of 2019. But there’s a case for the weakness to reverse.....

  • At the moment, SPLK stock looks reasonably weak from a trading standpoint. A downgrade to a “Neutral” rating from little-known Cleveland Research helped send shares down 6.2% on Thursday. That’s not the kind of response seen from a stock backed by confident investors.
  • Of course, that trading on Thursday highlights the potential opportunity here. SPLK stock trades at about nine times revenue and 50x next year’s consensus earnings per share estimate. Those aren’t multiples that suggest that the stock is cheap. But they are more than reasonable in the context of growth stock valuations at the moment. And with earnings on tap, those multiples suggest that SPLK stock can rally off a big report.

Short interest has decreased by 3.6% since the company's last earnings release.

One analyst has rated the stock with a sell rating, eight have issued a hold rating and twenty-three have given a buy rating to the company. The stock has a consensus rating of “Buy” and a consensus price target of $148.59.

Option trade to consider: Buy the SPLK DEC 20 2019 120.000 CALL at approximately $5.60.



California-based off-price retail apparel and home fashion store Ross Stores, Inc. (NASDAQ:ROST) will report its third-quarter earnings after the market closes. The consensus earnings estimate is $0.97 per share; but the whisper number is a little higher at $0.98. Ross Stores earned $0.91 during the same period last year and the stock has risen 36% year to date.

The strong overall economy continues to boost consumer confidence, and the retail sector has continued to show strength. Within the retail space, discount retailer has thrived, and Ross Stores (ROST) has been a top performer with shares up 36% in 2019 alone. The strong gain has been a result of 13 straight positive earnings surprises and sales have topped estimates each of the last three quarters.

Profits are up 17% annually the last five years and are expected to rise at another 9% per annum over the next five years.

With respect to this holiday season, there may be an especially large influx of consumers into Ross Stores due to.....

  • consumers are still somewhat concerned about a recession and may not want to overspend, and
  • tariffs could make full-price stores seem extra expensive this holiday season.

Consequently, Ross Stores could be due for a strong holiday season. If so, then ROST stock could be due for big gains into the end of the year.

Of the 20 analysts who cover the stock 11 rate it Strong Buy, 1 rate it Buy, 8 rates it Hold.


Option trade to consider: Buy the ROST DEC 20 2019 115.000 CALL at approximately $2.75.



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.

It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented.

If you wish to receive more options trading recommendations similar to this, which will help boost your portfolio strategy, check out the other  memberships available at Stock Options Made Easy.

When To Exit A Trade Based On Earnings?.....

It is also worth considering, when options trading earnings reports – “Do we exit on already existing profits or leave the companies to report their earnings and hope for bigger profit?” 

As most traders realize, there is a 50/50 chance that the company stock price could go either way after reporting earnings – even if the report is good, the stock price could reverse – and if you hold a call option, means depletion of an already good profit if it exists. A similar situation can be found if you hold a put option, and a report is not that sound (and you expect a profit from this) but the stock price can, at times move upwards due to traders bias or other external conditions......READ MORE.....

The Decision Is Yours!

Before You Trade Consider This Strategy……

"Trading Capital Management" is a key component of your trading strategy. The strategy, on which we base our trades to achieve maximum profit, and to minimize loss, is contingent on using an equal amount of money for each trade.

……continue reading this article……


”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!

Options traders are not successful because they win.

Options traders win because they are successful.


Best of Trading,
Ian Harvey
Director of Stock Options Made Easy

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