Dow surges 500 points, led by Nike, on hope earnings will be better than feared – CNBC

December 21, 2022 by No Comments

Holiday shoppers are rethinking their gift lists. That’s bad news for Target and Walmart, Stifel says

Stifel has trimmed its earnings forecasts for Target and Walmart for fiscal 2023 and 2024 as its consumer surveys suggest shoppers are rethinking their holiday gift lists and pulling back even more on spending.

“Our survey shows spending intentions continuing to worsen since early fall, with overall results below averages since May,” Stifel analyst Mark Astrachan wrote in a research note Wednesday.

Its mid-December survey suggests consumers will spend 4% less during the holiday season than they did last year. That’s down from an average forecast of 3% year-over-year growth over the past three months.

The souring mood is most pronounced among consumers who earn more than $100,000 per year, Astrachan said. This is significant because these higher-income shoppers account for an outsized portion of consumer spending. Still, lower income consumers are suffering the most from higher prices.

“We think heightened macroeconomic uncertainty, market volatility, and increased spending on staples/shelter as a percentage of household income have contributed to worsening trends,” he said.

With the lower estimates for Target comes a reduced price target for the discount retailer of $175, which is about 22% above where shares are currently trading. Stifel maintains its hold rating on both Target and Walmart.

— Christina Cheddar Berk

Less than 4 more shopping days until Christmas and every one matters

Nike’s more than 13% pop Wednesday is a good reminder of just how laser-focused investors will be on inventory levels as retailers report results.

With less than four shopping days left to go, a lot of the chatter about how the season is shaping up hasn’t been good. Foot traffic has been weak and the post-Black Friday lull appears to have been unnervingly quiet. That means a lot is riding on the final shopping days of the season.

Wells Fargo analyst Ike Boruchow said, “Taking a step back, as of today we’d say most companies appear in line to slightly below holiday plan with many crucial selling days still ahead.”

Boruchow said Capri<…….



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