Weeks of market ebullience are beginning to fade as the bad vibes of December make a comeback. There is still no concrete progress in the ongoing U.S.-China trade spat or the Trump-Democrat wall spat either, with parts of the U.S. government still shut down.
But what’s really rattling investors on Thursday is profit warnings from key retailers after a solid (yet debt-fueled) holiday shopping season. As a result, the Retail SPDR (NYSEARCA:XRT) is down more than 2.4%, falling away from critical resistance near its 50-day moving average — a level that turned the bulls around back in November and December.
Here are five stocks to sell in the industry that are headed for the clearance rack:
Macy’s (M)
Macy’s (NYSE:M) shares are getting slammed today, heading down nearly 20% and returning to early 2018 levels after the company lowered forward guidance. Management is now looking for fiscal 2019 earnings of between $3.95 and $4.00 per share vs. the $4.23 analysts were expecting. This is fueling a broad worry that the credit card binge that fueled holiday shopping in 2018 isn’t going to continue in 2019.
The company will next report results on Feb. 26 before the bell. Analysts are looking for earnings of $2.76 per share on revenues of $8.5 billion. When the company last reported on Nov. 14, earnings of 27 cents per share beat estimates by 13 cents on a 2.3% rise in revenues.
Kohl’s (KSS)
Kohl’s (NYSE:KSS) shares are down nearly 8% in mid-day trading on Thursday, falling away from resistance at the 200-day moving average that turned the bulls lower back in late November. This caps a decline of more than 21% from the double-top high near $82 set over the autumn. The decline comes despite the issuance of in-line forward guidance today, as the worry surrounding Macy’s affects the entire industry group.
The company will next report results on Mar. 5 before the bell. Analysts are looking for earnings of $2.16 per share on revenues of $6.7 billion. When the company last reported on Nov. 20, earnings of 98 cents per share beat estimates by 2 cents on a 1.3% rise in revenues.
Target (TGT)
Target (NYSE:TGT) shares are once again falling away from critical resistance near the $70-a-share level, threatening to violate a possible inverse head-and-shoulders basing pattern. This marks a 25% decline from the September high. Management reported that holiday comp-store sales increased 5.7% from the year-ago period and also reaffirmed forward guidance.
The company will next report results on Feb. 19 before the bell. Analysts are looking for earnings of $1.51 per share on revenues of more than $23.1 billion. When the company last reported on Nov. 20, earnings of $1.09 missed estimates by 2 cents on a 5.7% rise in revenues.
TJX (TJX)
Shares of off-price retailer TJX (NYSE:TJX) are falling away from resistance near the 200-day moving average, threatening a retest of the December lows near $42. Already, prices are down nearly 18% from the three-month topping pattern set in the autumn. On a technical basis, the stock is on the verge of a “death cross” with the 50-day average set to decline under the 200-day average.
The company will next report results on Feb. 19 before the bell. Analysts are looking for earnings of 68 cents per share on revenues of nearly $11 billion. When the company last reported on Nov. 20, earnings of 63 cents per share beat estimates by 2 cents on a 12.1% rise in revenues.
Walmart (WMT)
Walmart (NYSE:WMT) shares are falling away from resistance near the 50-day moving average, setting up another challenge of the 200-day average capping a decline of more than 11% from its November high. Zooming out, the stock has been unable to push above the mid-$100s as the company’s e-commerce efforts to push back against Amazon (NASDAQ:AMZN) fail to generate much excitement.
The company will next report results on Feb. 14 before the bell. Analysts are looking for earnings of $1.32 per share on revenues of $139.3 billion. When the company last reported on Nov. 15, earnings of $1.08 per share beat estimates by 6 cents on a 1.4% rise in revenues.
As of this writing, William Roth did not hold a position in any of the aforementioned securities.
