Earnings Previews: Applied Materials, Deere, Foot Locker, Ross Stores

The three major U.S. equity indexes closed mixed on Tuesday. The Dow Jones industrials added 0.71%, while the S&P 500 rose by 0.19%, and the Nasdaq slipped by 0.23%. Seven of 11 sectors ended the day higher, led by consumer staples and consumer cyclicals (both up 1.1%). Solid earnings reports from Walmart and Home Depot paved the way for consumer-oriented stocks. Then, too, Bed Bath & Beyond has soared nearly 350% (up 20% Tuesday) over the past two weeks as retail investors do their best to squeeze short sellers. All three major indexes traded lower in Wednesday’s premarket session.

Before U.S. markets opened on Wednesday, Target missed both consensus profit and revenue estimates, even though the estimates were lowered after the company warned investors of trouble in mid-May. The stock traded down about 4% Wednesday morning.

Lowe’s beat the consensus estimate for earnings per share (EPS) but missed the revenue forecast by 2.4%. The company expects fiscal year revenue and same-store sales to come in at the low end of its outlook range, while operating income and EPS finish near the top. Shares traded up about 3.5% in Wednesday’s premarket.

TJX beat the consensus EPS estimate but missed on revenue. The company also issued downside EPS guidance for the current quarter. Full fiscal year same-store sales guidance was lowered from previous guidance of down 1% to 2% to a new range of down 2% to 3%. The shares were trading about 1.6% lower.

We have previewed these three companies set to report results after U.S. markets close Wednesday: Bath & Body Works, Cisco Systems and SQM. Before markets open on Thursday, Canaan, Kohl’s, NetEase and Tapestry are on deck to post quarterly results.

Here is a look at what to expect from four companies set to share their quarterly results after markets close on Thursday or before they open on Friday.

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Applied Materials

Shares of semiconductor equipment maker Applied Materials Inc. (NASDAQ: AMAT) have declined by about 17.6% in the past 12 months. From their 52-week high of mid-January, the shares are down about 35%. The good news is that since posting a 52-week low in early July, the stock has added 26%.

The outlook for semiconductors is not particularly rosy these days, and that dim outlook works its way down to semiconductor equipment makers like Applied Materials. What the company has to say about the industry outlook for the next 12 to 18 months probably will be more influential than what its second-quarter performance was. The company reports results after markets close Thursday.

Of 30 analysts covering the stock, 21 have Buy or Strong Buy ratings and the other nine rate the shares at Hold. At a recent price of around $108.50 a share, the upside potential based on a median price target of $126.10 is 16.2%. At the high target of $197.00, the upside potential is 81.6%.

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