A day after the U.S. Commerce Department released better-than-expected retail sales data, corporate America followed up with a number of encouraging retail-industry reports.
T.J. Maxx parent TJX Companies’ (TJX, +5.8%) stock popped Wednesday after the off-price retailer delivered plenty of good news: Namely, third-quarter revenue and earnings beat Wall Street estimates, same-store sales jumped 12.7%, and the company signaled that supply-chain issues won’t be a concern heading into the holiday season.
“We are in an excellent inventory position, with most of the product needed for the holiday season either on hand or scheduled to arrive at our stores and online in time for the holidays,” CEO Ernie Herrman says.
CFRA analyst Zachary Warring reiterated his Strong Buy rating on TJX shares, and raised his 12-month price target to $93 per share from $85.
“The company increased its store count by 19 in the quarter, returned $1.1 billion to shareholders through share repurchases and dividends, and raised its outlook for share repurchases for fiscal 2022 by $500 million,” he says. “We see TJX well-positioned as consumer confidence drops, inflation continues to hit consumers’ pockets, and government stimulus and savings fade.”
Home improvement chain Lowe’s (LOW, +0.4%) saw a more modest stock gain despite the retailer easily clearing top- and bottom-line estimates and raising its full-year revenue estimate to $95 billion from $92 billion previously.
Meanwhile, shares in discounter Target (TGT, -4.7%) took a sizable haircut, although not because of weak Q3 results. Indeed, a robust Halloween helped propel earnings and sales past Wall Street’s expectations. Rather, investors were concerned about margins, as Target CEO Brian Cornell said his company is “protecting prices” for consumers by absorbing some of the input-cost inflation it’s facing.
Weakness in financials (-1.2%) and energy (-1.5%) weighed on the major indexes, however. The latter sector slumped amid a 3.0% decline in U.S. crude oil, to $78.36 per barrel, after the International Energy Agency and the Organization of the Petroleum Exporting Countries warned that rising oil supplies could cut into prices.
The Dow Jones Industrial Average declined 0.6% to 35,931, while the S&P 500 (-0.3% to 4,688) and Nasdaq Composite (-0.3% to 15,921) also took a breather.
Other news in the stock market today:
- The small-cap Russell 2000 declined 1.2% to 2,377.
- Gold futures improved by 0.9% to $1,868.80 per ounce.
- The CBOE Volatility Index (VIX) jumped 4.2% to 17.06.
- Bitcoin edged 0.9% higher to $60,374.60. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
- Roku (ROKU) was a notable decliner, sliding 11.3% after MoffettNathanson analyst Michael Nathanson downgraded the streaming stock to Sell from Neutral (Hold). In a notee, Nathanson wrote that he believes Wall Street’s longer-term earnings and revenue estimates are “just too damn high,” especially in the wake of the stock’s underperformance of late. Truist Securities analyst Matthew Thornton also chimed in on ROKU today, cutting his price target by $360 to reflect a “near-term supply chain headwind to ad revenue.” With today’s slide, ROKU is now down roughly 50% from its late-July record high near $490.
- Rivian Automotive (RIVN) suffered its first down day as a publicly traded company, slumping 15.1%. The electric vehicle (EV) maker had its first day of trading last Wednesday, Nov. 10, in what was the biggest initial public offering (IPO) of the year. RIVN stock opened at $106.75 that day before embarking on a five-day rally that saw the shares gain more than 61% through last night’s close.
Warren Buffett’s Latest Buys and Sells
Lost in the shuffle of a busy retail-earnings week was the latest regular treasure trove for Buffett-ologists.
Following Monday’s close, Warren Buffett’s Berkshire Hathaway (BRK.B) filed its latest Form 13F – a quarterly disclosure the SEC requires of all institutional investment managers with $100 million or more in assets.
We ask your forgiveness for sounding like a broken record, but the Oracle of Omaha was a big ol’ bear once more. Berkshire trimmed or exited more positions than it added to or initiated for the fourth consecutive quarter, with a particularly downbeat focus on healthcare and financial-related stocks.
If you want to see what Buffett’s full list of holdings looks like after the changes, we’ve updated our Berkshire Hathaway portfolio tracker.
But if you’re primarily interested in Buffett’s latest stock purchases and sales – including the two new positions he established, and the three stocks he kicked to the curb completely – check out our review of Uncle Warren’s third-quarter moves.