Laboratories, Pacific Sunwear of California and Target CHICAGO--(BUSINESS WIRE)--May 21, 2007 Zacks.com releases the list of companies likely to issue earnings surprises. This week's list includes Limited Brands (NYSE: LTD), Lowe's (NYSE: LOW), Mylan Laboratories (NYSE: MYL), Pacific Sunwear of California (Nasdaq: PSUN) and Target (NYSE: TGT). To see more earnings analysis, visit http://at.zacks.com/?id=3207. Earnings Preview is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com. Yawn.... This might the best way to describe the last full week of trading in May. First-quarter earnings season is basically done, outside of retailers and some late reporters. The economic calendar is fairly light. And the Friday before Memorial Day tends to be marked by light volume. So what's going to move the markets? Merger news will play a role, though given the extremely high number of deals already announced so this year, calling for more mergers to occur is akin to forecasting a sunny day in June - it's just going to happen. Sentiment remains bullish. The trend in full-year earnings estimate revisions are positive, though the number of revisions - both positive and negative - is going to start falling. At some point the markets are going to pay more attention to the combination of slow and lumpy economic growth and rising energy prices, but until that occurs, the Dow's upward trend is our friend. The earnings calendar for the week of May 21 - 25 contains 106 companies, 13 of which are in the S&P 500. Among the more notable names are Lowe's (NYSE: LOW), Limited (NYSE: LTD) and Target (NYSE: TGT). The economic calendar will stay pretty quiet until Thursday, when April durable goods orders and new home sales data will be released. April existing home sales data will be released on Friday. Companies That Could Issue Positive Earnings Surprises during the Week of May 21 - 25 Brokerage analysts have been raising their forecasts on Mylan Laboratories (NYSE: MYL). During the past 30 days, two analysts raised their first-quarter forecasts, pushing the consensus estimate up two cents to 45 cents per share. The Most Recent Consensus is more bullish at 52 cents per share. MYL has topped expectations during each of the past four quarters by an average margin of five cents. Mylan Laboratories is scheduled to report on Thursday, May 24, 2007. Companies That Could Issue Negative Earnings Surprises during the Week of May 21 - 25 Pacific Sunwear of California (Nasdaq: PSUN) recently said that same-store sales fell 16.5% last month. As a result, the company cut its first-quarter guidance to a loss of four to five cents. All 12 covering brokerage analysts slashed their forecasts in response, sending the consensus earnings estimate down to a loss of four cents per share from a profit of seven cents per share. PSUN has missed expectations twice in the past three quarters. Pacific Sunwear is scheduled to report on Monday, May 21, after the close of trading. Limited Brands (NYSE: LTD) essentially cut its first-quarter guidance in half following a 1% decrease in April same-store sales and weaker margins. The company noted particular weakness at its Victoria's Secret stores. All of the covering brokerage analysts cut their forecasts during the past week, lowering the consensus estimate from 24 cents per share to 13 cents per share. LTD's last earnings report was a penny below expectations. Limited Brands is scheduled to report on Wednesday, May 23, after the close of trading. Want to turn earnings surprises into quick profits? Learn how by visiting http://at.zacks.com/?id=3206. About the Zacks Rank Since 1988, the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988, #1 Rank stocks have generated an average annual return of +31.9%. During the 2000-2002 bear market, Zacks #1 Rank stocks gained +43.8%, while the S&P 500 tumbled -37.6%. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). Since 1988, Zacks Rank #5 stocks have underperformed the S&P 500 by 132% annually (+5.1% vs. +11.9%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively. Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=3567. 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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates. (a) Zacks Rank performance is the total return (price changes + dividends) of equal weighted portfolios, consisting of those stocks with the indicated Zacks Rank, assuming zero transaction costs. These returns are not the result of a backtest; these are actual returns since 1988. The stocks in the Zacks Rank portfolios were available to Zacks clients before the beginning of each month (monthly rebalancing). Performance results from 1988 through September 2006 are based on a subset of all Zacks Rank stocks that excludes stocks covered by only one analyst and ADR's. Starting in October 2006 and going forward the performance numbers for the Zacks Rank is based upon the full universe of stocks which is more reflective of the list of stocks that customers will find on the Zacks websites. 2007 returns are for the period of Jan 1 - Mar 31, 2007. (b)The S&P 500 Index ("S&P 500") is a well-known, unmanaged index of the prices of 500 large-company common stocks selected by Standard & Poor's. The S&P 500 includes the reinvestment of all dividends, no transaction costs, and represents the gross returns before management fees. Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security. CONTACT: Zacks.com Charles Rotblut, CFA Phone: 312-265-9352 Email: email@example.com Visit: www.Zacks.com
Zacks Earnings Preview: Limited Brands, Lowe's, Mylan
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