The Week in Preview: A First Look at Retail: Walmart, JCPenney and Others

Walmart's long-term EPS growth forecast is 11.8% and its earnings multiple is 13x, which is lower than the retail average. The First Call consensus recommendation has been to buy WMT for more than 90 days. The mean price target is $60.27. Bloggingstocks contributor Sheldon Liber recently included WMT on a list of cheap stocks. Shares have retreated in the past few weeks from a 52-week high of $55.20 and closed the week at $52.90.

Venerable department store/catalog retailer, JCPenney Co. Inc. (JCP), on the other hand, is expected to post a small decline in earnings. The Plano, Tex.-based company changed its catalog strategy, announced leadership changes and was recognized as a leader in customer service in its fourth quarter. Earnings are expected to have fallen 12 cents per share from a year ago to $0.82. And sales for the three months that ended in January are expected to have fallen 4.0% to $5.5 billion. The full-year forecast is for earnings of $1.06 per share (-57.9%) on $17.5 billion in revenue (-5.1%). Earnings have come within a penny or two of estimates in the past five quarters.

JCPenney's long-term EPS growth forecast is 9.3%, about the same as that of rival Macy's Inc. (M), and its earnings multiple is 18x. The consensus recommendation is to buy JCP, and the mean price target is $35.15. The stock was recently recommended by Bloggingstocks contributor Joseph Lazzaro, and the company has seen some success in its revitalization efforts. Shares have been declining since reaching a 52-week high of $37.21 in October, and closed Friday at $24.89.

Earnings from Abercrombie & Fitch Co. (ANF) also are expected to have declined, while sporting goods superstore operator Cabela's Inc. (CAB) and travel services provider Priceline.com Inc. (PCLN) are expected to post earnings growth this week.

Analysts anticipate that Whole Foods Market Inc. (WFMI) will report that its per-share earnings rose six cents from a year ago to $0.26 for the three months that ended in December. Revenue is expected to total $2.6 billion, up 5.2% from a year ago, during a fiscal first quarter in which it launched an online coupon program and a website for mobile devices. So far, the forecast for the second quarter is for sequential and year-over-year earnings growth. The world's largest natural foods chain topped consensus earnings estimates in the past four quarters, by as much as a nickel per share.

The long-term EPS growth forecast is 15.7%, which is better than that of fellow grocery chains Kroger Co. (KR) and Safeway Inc. (SWY). Whole Foods' earnings multiple of 26x is less than the industry average. The Wall Street Journal recently remarked on WFMI's growth potential, and Investopedia called it "pricey but irresistible." Shares have faced resistance around $29 since November but closed the week at $29.75.

However, it's a different story for embattled supermarket chain Winn-Dixie Stores Inc. (WINN). During the three months that ended in December, Winn-Dixie announced management changes, offered health insurance to customers and faced pressure from shareholders. Analysts expect this Florida-based company to report that it swung to a per-share loss of $0.15 in the fiscal second quarter from earnings of $0.30 per share in the year-ago period. This is the second quarterly loss in a row, but analysts expect the company to return to the black in the third quarter, and to post a slim profit for the fiscal year. Earnings results were better than expected in three of the previous four quarters, beating estimates by as much as 36 cents per share. Second quarter revenue is expected to total $2.2 billion, or 3.3% lower than a year ago.

Winn-Dixie's long-term EPS growth forecast is 7.0%, which is better than the sector average. Zacks isn't impressed with state of the supermarket industry, but Investopedia points out that WINN is trading below book value, and some even see it as a top pick. Shares are 16.9% lower than three months ago and closed the week a buck and change above last year's March low.

Family-style restaurant chain operator Denny's Corp. (DENN) is expected to have swung to a profit in its fourth quarter, and analysts are looking for earnings growth from food producers Hormel Foods Corp. (HRL) and Kraft Foods Inc. (KFT) this week.

O'Reilly Automotive Inc. (ORLY) is a Springfield, Mo.-based retailer of aftermarket auto parts. In the three months that ended in December, O'Reilly announced a joint venture and has been transitioning to a paperless distribution system. Analysts expect O'Reilly to report fourth-quarter earnings of $0.51 per share, up from $0.37 per share in the same period of last year. Revenue for the quarter is expected to be 6.7% higher to $1.2 billion. The forecast for the year is for earnings of $2.24 per share on $4.9 billion in revenue, compared to the previous year's $1.64 per share on $3.6 billion. O'Reilly bested consensus earnings estimates in recent quarters, by as much as eight cents per share.

O'Reilly's long-term EPS growth forecast of 18.6% is better than that of competitors AutoZone Inc. (AZO) and Genuine Parts Co. (GPC). O'Reilly's earnings multiple of 15x is less than the industry average. The consensus recommendation remains to buy ORLY, with a mean price target of $45.48. O'Reilly received recent upgrades from Deutsche Bank and FBR Capital. Shares have traded between $37 and $40 since November, supported by the 100-day moving average, and closed Friday at $39.80.

Again, anticipated earnings are a different story for Advance Auto Parts Inc. (AAP). During the fourth quarter that ended in December, the company launched a new website and saw a new member join its board. Analysts expect Advance to post earnings of $0.46 per share, down a nickel per share from the same period of last year. Revenue for the period is expected to be 3.0% lower to $1.2 billion. However, the full-year forecast is for earnings of $3.07 per share (+10.4%) on $5.4 billion in revenue (+5.5%). Earnings have topped the consensus estimates in recent quarters, by as much as 13 cents per share.

The long-term EPS growth forecast for Advance Auto Parts is 13.8%, about the same as AutoZone, and its earnings multiple is 11x. Analysts have on average recommended buying AAP for more than 90 days. The mean price target is $45.95. The Motley Fool likes Advance's cash flow, but the stock was recently downgraded as well. At $42.81, AAP is 9.1% higher than three months ago, and recently broke above its 200-day moving average.

Genuine Parts also reports this week, and analysts anticipate lower fourth-quarter earnings from it, while Goodyear Tire & Rubber Co. (GT) is expected to have narrowed its net loss.

Some other companies scheduled to report this week are Analog Devices Inc. (ADI), Applied Materials (AMAT), Barrick Gold (ABX), CBS Corp. (CBS), Deere & Co. (DE), DirecTV Group Inc. (DTV), Hewlett-Packard (HPQ), Intuit (INTU), Martha Stewart Living Omnimedia (MSO), Merck & Co. (MRK), PG&E Corp. (PCG), Qwest Communications (Q) and Waste Management (WM).

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