Retail ETFs in Focus Ahead of Big-Box Q3 Earnings

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The retail sector is in focus with big retailers like Home Depot HD, Lowe’s LOW, Wal-Mart WMT and Target TGT, as well as store channels like Nordstrom JWN and Kohl’s KSS, due to report earnings. So far, 23 out of 34 retailers on the S&P 500 Index have already reported. Earnings of these companies are up 17.3% from the same period last year on 6.3 higher revenues, with 52.2% beating EPS estimates and 47.8% beating revenue estimates. Overall, the retail sector is expected to report earnings growth of 18% on 6.3% revenue growth. Given this, traditional retail ETFs are in focus. SPDR S&P Retail ETF XRT and VanEck Vectors Retail ETF RTH have gained nearly 5% each over the past month.Stay up-to-date with all quarterly releases:See Zacks Earnings Calendar.What Our Model Unveils for Retailer EarningsAccording to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Home Depot has an Earnings ESP of +4.09% and a Zacks Rank #2. The company saw a positive earnings estimate revision of a penny over the past seven days for the to-be-reported quarter. Analysts raising estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. The company delivered an average earnings surprise of 1.64% in the last four quarters. Home Depot is scheduled to report on Nov. 12, before market open.Lowe’s has an Earnings ESP of +2.00% and a Zacks Rank #3. The company saw no earnings estimate revision for the to-be-reported quarter over the past 30 days and delivered an earnings surprise of 3.33%, on average, in the last four quarters. LOW is slated to report earnings on Nov. 19. Wal-Mart has an Earnings ESP of +1.61% and a Zacks Rank #2. The company saw no earnings estimate revision over the past 30 days for the to-be-reported quarter. Wal-Mart delivered an average four-quarter earnings surprise of 6.89%. Wal-Mart is scheduled to report on Nov. 19, before market open (see: all the Consumer Discretionary ETFs here).Target has an Earnings ESP of +0.73% and a Zacks Rank #2. The company saw no earnings estimate revision over the past month for the to-be-reported quarter. It delivered an earnings surprise of 20.26% for the last four quarter...

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