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Futures Higher
• This morning, S&P 500 index futures are pointing to a positive market opening
OVERNIGHT UPDATES when trading begins today.
• U.S. equity market stocks were higher at the end of trading Tuesday, with the S&P
Europe mixed. Tokyo rose 500 index settling at 2,682.17 for the close. The index saw an increase of 0.33
1.02%. Hong Kong rose percent for the day.
1.33%. Shanghai rose
1.05%. • In its third-quarter results expected today, CFRA looks for Dick's Sporting Goods
(DKS 36 ***) to post earnings of $0.24 per share vs. $0.35 per share for the same
period one year earlier. Capital IQ Consensus analysts expect earnings per share
BONDS: 10-year notes at
of $0.25. We expect revenues to increase 0.8% in FY 19 (Jan.) and be up 2.3% in
3.055%, 30-year bonds at
FY 20, as DKS transforms itself into a more focused, higher-margin business
3.312%.
through exits of the slower growing, lower-margin electronics and hunt segments.
We forecast low-to-mid-teen e-commerce growth, driven in part by improvements
FOREIGN EXCHANGE: to e-commerce fulfillment, and remain enthusiastic about DKS' private labels
Euro at $1.1279, Sterling at offerings. In apparel, we anticipate a single-digit decline, due to Under Armour's
$1.2761, Dollar at 113.76 decision to expand distribution to lower-priced retailers.
yen.
• J. M. Smucker Company (SJM 109 ***) is set to report second-quarter results.
PRECIOUS METALS: Gold CFRA is projecting earnings per share of $2.30, while Capital IQ Consensus
at $1,212.80. expects earnings of $2.29 per share. The company posted earnings of $1.71 for
the second-quarter last year.
ENERGY: WTI crude at • In its third-quarter earnings announcement, CFRA is expecting Tiffany & Co (TIF
$51.94, London Brent crude 105 ****) to post earnings of $0.86 vs. earnings per share of $0.80 for the like
at $60.59. period one year ago. Capital IQ Consensus sees earnings of $0.77 per share.
U.S.
11/27/2018
• CFRA UPGRADES OPINION ON SHARES OF THE BUCKLE, INC. (BKE 20 ***) TO HOLD
FROM STRONG SELL: We keep our 12-month target price at $16, a forward P/E of 9.5X our
NTM EPS estimate of $1.68. We keep our FY 19 (Jan.) estimate at $1.88 and FY 20's at
$1.66. BKE posts Oct-Q EPS of $0.42, missing expectations by $0.04. Revenues decreased
4.1% to $215.1 million, missing consensus, with women's down 8.5%, men's down 2% and
accessories down 7.5%. Comparable store sales declined 1.4%, missing consensus. Gross
margin narrowed 50 basis points to 40.0%, missing consensus, reflecting 95 basis points of
deleveraged of occupancy buying and distribution costs, partially offset by a 45-basis point
improvement in merchandising margin. Units per transaction increased 0.5%, while average
unit retail was down 2% and average transaction value was down 1.5%. We believe BKE's
product assortments are not resonating well with fashion-conscious young consumers, given
inventory was up 13% (comparable store up 9%), alongside negative sales growth. In our
view, future gross margin deterioration is likely. /Camilla Yanushevsky
•
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As investors gain experience with factor investing, usage of these strategies through ETFs
and other financial instruments has increased. Yet, many of these factor adopters still have
over 80% of their equity and fixed income allocations in traditional active and/or market-cap
weighted passive strategies, leaving lots of room for potential growth. Particularly so as these
investors are less worried about over crowding than in the past.
• Invesco recently published the results of its 2018 Global Factor Investing Study based on
interviews with key decision makers of more than 300 institutional and wholesale factor
investors. Interviews conducted independently by NMG Group included hourly meetings with
financial advisors, insurance companies, private banks and pension funds around the world.
This is an excerpt of the story, for the rest please visit the Trends & Ideas page on MarketScope
Advisor at http://advisor.marketscope.com.
NOVEMBER 28, 2018
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analyst judgment, and the extent to which some types of data
Glossary is disclosed by companies.
STARS
Since January 1, 1987, CFRA Equity and Fund Research 12-Month Target Price
Services, and its predecessor S&P Capital IQ Equity Research The equity analyst's projection of the market price a given
has ranked a universe of U.S. common stocks, ADRs security will command 12 months hence, based on a
(American Depositary Receipts), and ADSs (American combination of intrinsic, relative, and private market
Depositary Shares) based on a given equity's potential for valuation metrics, including Fair Value.
future performance. Similarly, we have ranked Asian and
European equities since June 30, 2002. Under proprietary CFRA Equity Research
STARS (STock Appreciation Ranking System), equity CFRA Equity Research is produced and distributed by
analysts rank equities according to their individual forecast of Accounting Research & Analytics, LLC d/b/a CFRA ("CFRA
an equity's future total return potential versus the expected US"). Certain research is distributed by CFRA UK Limited
total return of a relevant benchmark (e.g., a regional index (together with CFRA US, "CFRA"). Certain research is
(S&P Asia 50 Index, S&P Europe 350® Index or S&P 500® produced by Standard & Poor's Malaysia Sdn. Bhd ("CFRA
Index)), based on a 12-month time horizon. STARS was Malaysia") under contract to CFRA US.
designed to meet the needs of investors looking to put their
investment decisions in perspective. Data used to assist in Abbreviations Used in Equity Research Reports
determining the STARS ranking may be the result of the CAGR - Compound Annual Growth Rate
analyst's own models as well as internal proprietary models CAPEX - Capital Expenditures
resulting from dynamic data inputs. CY - Calendar Year
DCF - Discounted Cash Flow
S&P Global Market Intelligence's Quality Rank DDM - Dividend Discount Model
(also known as S&P Capital IQ Earnings & Dividend EBIT - Earnings Before Interest and Taxes
Rankings) - Growth and stability of earnings and dividends EBITDA - Earnings Before Interest, Taxes, Depreciation and
are deemed key elements in establishing S&P Global Market Amortization
Intelligence's earnings and dividend rankings for common EPS - Earnings Per Share
stocks, which are designed to capsulize the nature of this EV - Enterprise Value
record in a single symbol. It should be noted, however, that FCF - Free Cash Flow
the process also takes into consideration certain adjustments FFO - Funds From Operations
and modifications deemed desirable in establishing such FY - Fiscal Year
rankings. The final score for each stock is measured against a P/E - Price/Earnings
scoring matrix determined by analysis of the scores of a large P/NAV - Price to Net Asset Value PEG Ratio - P/E-to-
and representative sample of stocks. The range of scores in Growth Ratio PV - Present Value
the array of this sample has been aligned with the following R&D - Research & Development ROCE - Return on Capital
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STARS Ranking system and definition:
★★★★★ 5-STARS (Strong Buy):
Total return is expected to outperform the total return of a
relevant benchmark, by a wide margin over the coming 12
months, with shares rising in price on an absolute basis.
★★★★★ 4-STARS (Buy):
Total return is expected to outperform the total return of a
relevant benchmark over the coming 12 months, with shares
rising in price on an absolute basis.
★★★★★ 3-STARS (Hold):
Total return is expected to closely approximate the total
return of a relevant benchmark over the coming 12 months,
with shares generally rising in price on an absolute basis.
★★★★★ 2-STARS (Sell):
Total return is expected to underperform the total return of a
relevant benchmark over the coming 12 months, and the share
price not anticipated to show a gain.
★★★★★ 1-STAR (Strong Sell):
Total return is expected to underperform the total return of a
relevant benchmark by a wide margin over the coming 12
months, with shares falling in price on an absolute basis.
Relevant benchmarks:
In North America, the relevant benchmark is the S&P 500
Index, in Europe and in Asia, the relevant benchmarks are
the S&P Europe 350 Index and the S&P Asia 50 Index,
respectively.
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Disclosures About CFRA Equity Research's Distributors:
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Stocks are ranked in accordance with the following ranking CFRA UK Limited, which is regulated by the Financial
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recommendations refer to the Glossary section of the report redistributed by third parties such as brokers or financial
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