Savings Experiment: Tissues vs. Toilet Paper
An Insider Shares Mark Zuckerberg's 6 Secrets for Success
Tractor Supply Company (NASDAQ: TSCO) is on the upswing today after the retailer raised its second-quarter profit estimate. The company now expects to earn $1.48 to $1.50 per share in the second quarter, compared to analysts' consensus forecast for a profit of $1.24 per share. Full-year earnings are now expected to range between $2.78 and $2.92 per share, again outpacing Wall Street's average estimate of $2.64 per share.
Tractor Supply cited tighter control over its marketing expenses for the upwardly revised earnings guidance. However, the retail issue expects consumer spending trends to remain weak through the remainder of 2009, and accordingly trimmed its full-year revenue outlook. The company is now predicting sales of $3.15 billion to $3.25 billion for 2009, down from its earlier guidance of $3.20 billion to $3.30 billion.
The stock bolted higher out of the gate this morning as a result of its stronger-than-expected second-quarter outlook, up more than 11% at its session high of $44.80. TSCO is perched atop support from its 10-week moving average, but the $45 level could prove to be a challenging resistance level. This chart region previously served as a technical roadblock from 2003 through 2005, and it capped the equity's progress again last fall.
However, TSCO is the target of a healthy amount of skepticism on Wall Street. If this negativity starts to unravel in the wake of today's news, the momentum could help the shares tackle looming resistance.
For example, Thomson Reuters reports that the security's average 12-month price target from analysts is $41.86, representing a notable discount to today's intraday peak. Plus, Zacks reports that TSCO has seven lukewarm Hold ratings from brokerage firms, along with one Strong Sell rating. Any upgrades or price-target boosts from analysts could help the stock extend today's gains.
Short sellers could also provide the necessary catalyst to propel TSCO higher. A hefty 19% of the equity's float is sold short, representing 9.5 days' worth of buying power at the stock's average daily trading volume.
Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
