CHICAGO, Nov. 14, 2011 /PRNewswire/ -- Zacks.com releases the list of companies likely to issue earnings surprises. This week's list includes The Limited (NYSE: LTD), Home Depot (NYSE: HD), Target (NYSE: TGT), China Sunergy (Nasdaq: CSUN) and Tower Semiconductor (Nasdaq: TSEM). To see more earnings analysis, visit http://at.zacks.com/?id=3207.
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Potential Positive or Negative Surprises
The best indicators of firms likely to report positive surprises are a recent history of positive surprises and rising estimates going into the report. The Zacks Rank is also a good indicator of potential surprises. Similarly, a recent history of earnings disappointments, cuts in the average estimate for the quarter in the month before the report is due and a poor Zacks Rank (#4 or #5) are often red flags pointing to a potential disappointing earnings report.
Potential Positive Surprises
The Limited (NYSE: LTD) is expected to earn $0.24 per share, up from $0.18 a year ago. Last time out it had a positive surprise of 4.35%, and over the last four weeks analysts have raised their estimates by 3.44% for the quarter. LTD is a Zacks #2 Ranked stock.
Home Depot (NYSE: HD) is expected to earn $0.59 per share versus EPS of $0.51 a year ago. Last time out it had a positive surprise of 4.88%, and over the last four weeks analysts have raised their estimates by 0.62% for the quarter. HD is a Zacks #2 Ranked stock.
Target (NYSE: TGT) is expected to earn $0.74 per share versus EPS of $0.74 a year ago. Last time out it had a positive surprise of 6.19%, and over the last four weeks analysts have raised their estimates by 0.64% for the quarter. TGT is a Zacks #2 Ranked stock.
Potential Negative Surprises
China Sunergy (Nasdaq: CSUN) is expected to lose $0.40 per share versus EPS of $0.35 a year ago. Last time out it had a negative surprise of 13.51%, and over the last four weeks analysts have cut their estimates by 31.67% for the quarter. CSUN is a Zacks #4 Ranked stock.
Tower Semiconductor (Nasdaq: TSEM) is expected to earn $0.08 per share versus EPS of $0.11 a year ago. Last time out it had a negative surprise of 83.33%, but over the last four weeks analysts have not changed their estimates. TSEM is a Zacks #5 Ranked stock.
Dirk Van Dijk, CFA, is the Chief Equity Strategist for Zacks.com.
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 +28%. 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 significantly underperformed the S&P 500 (+3% versus +10%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
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