U.S. equities are pausing for breath on Friday, keeping the Dow Jones Industrial Average above the 20,000 level, but resulting in some selling pressure in specific sectors. Technology, financial and a number of consumer stocks are showing weakness.
Retailers in particular are rolling over as investors worry about the downsides of President Donald Trump’s aggressive proposed trade policies, including a possible border tax (which would increase the cost of imported merchandise).
Here are three that are getting smashed right now.
Retail Stocks to Sell: Wal-Mart Stores Inc (WMT)
Wal-Mart Stores Inc (NYSE:WMT) shares are breaking out of a two-month downtrend, falling below their lower Bollinger Band to return to lows not seen since May. Analysts at Stifel resumed coverage on the company last Friday with a hold rating, as they anticipate U.S. comp-store sales growth of 1% to 2% and low single-digit international sales growth to continue through the end of fiscal 2019.
The company will next report results on Feb. 21 before the bell. Analysts are looking for earnings of $1.29 per share on revenues of $130.5 billion.
Retail Stocks to Sell: Target Corporation (TGT)
The situation continues to get worse for Target Corporation (NYSE:TGT), which is falling out of a three-year trading range on Friday to touch the $63-a-share level for the first time since 2014. On a technical basis, the situation is even worse as shares have breached the 200-week moving average for the first time since 2011.
The company pre-announced negative results on Jan. 18, leading Stifel analysts to admit they see limited near-term catalysts to help reinvigorate top-line growth without increased capital spending.
The company will next report results on Feb. 28 before the bell. Analysts are looking for earnings of $1.51 per share on revenues of $20.7 billion.
Retail Stocks to Sell: Costco Wholesale Corporation (COST)
Costco Wholesale Corporation (NASDAQ:COST) shares are dropping to the lower end of a two-month trading range after failing to move over resistance near the $165-a-share level. Watch for a possible return to the 200-day moving average near $155, filling the gap from December. Back in December, RBC Capital Markets analysts noted that margins were hit by higher general expenses — something that will only get worse under a border tax plan from Trump.
The company will next report results on March 2 after the close. Analysts are looking for earnings of $1.35 per share on revenues of $29.8 billion.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
