Zacks Earnings Trends Highlights: Home Depot, Amazon and Lowe's

For Immediate ReleaseChicago, IL – February 27, 2025 – Zacks Director of Research Sheraz Mian says, "Total earnings for the 456 S&P 500 companies that have reported results are up +13.6% from the same period last year on +5.5% higher revenues, with 77.6% beating EPS estimates and 66.7% beating revenue estimates."Retail Earnings: An In-Depth AnalysisNote: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>Here are the key points:With more than 90% of the earnings reports already in, we can safely say that it has been a good reporting cycle, with the growth pace showing a notable accelerating trend and companies comfortably beating consensus estimates.Total earnings for the 456 S&P 500 companies that have reported results are up +13.6% from the same period last year on +5.5% higher revenues, with 77.6% beating EPS estimates and 66.7% beating revenue estimates.The reporting focus is shifting to the Retail sector, where the brick-and-mortar operators are on deck to report results in the days ahead. However, more than half of the Zacks Retail sector companies have already reported Q4 results.For the Zacks Retail sector, we now have Q4 results from 95.3% of the sector’s market capitalization in the S&P 500 index. Total earnings for these companies are up +32.3% from the same period last year on +7.0% higher revenues, with 72.0% beating EPS estimates and 72.0% beating revenue estimates. Excluding Amazon’s results from the reported Retail sector numbers, the Q4 earnings and revenue growth rates adjust down to +4.6% and +5.4%, respectively.Retail Earnings: Good or Bad?The earnings focus lately has been on the Retail sector, with big-box operators coming out with quarterly results. Walmart shares were down following its release as market participants were disappointed with its guidance, particularly on the earnings front. Walmart’s results were rock solid, with continued comp gains on the back of market share gains and e-commerce momentum.Walmart’s guidance is likely nothing more than conservatism on the part of management, as there has been nothing in the company’s line items that would suggest impending margin pressures. We credit the stock’s post-release weakness more to a sell-the-news type of reaction following Walmart shares’ recent outperformance. Even after its recent weakness, Walmart shares are up +62.1% over the past year compared to the S&P 500 index’s +18.3% gain and Amazon’s AMZN +23.3% gain.Unlike Walmart, Home Depot HD shares were up following the earnings release despite weak guidance. What the market liked in the Home Depot release was the company’s better-than-expected comps, which turned positive for the first time after eight back-to-quarters of declines. We saw a similar development with Lowe’s LOW, with the company’s comps turning positive after eight quarters of declines.The home-improvement retailers have been operating in a challenging macro environment, with elevated interest rates weighing on home sales and spending on remodeling projects. Housing bulls cite the strong labor market, record home equity levels, and favorable demographic trends as sufficient to produce a recovery, even if long-term interest rates continue to remain around current levels. The comp recovery for Home Depot and Lowe’s can be interpreted to validate this favorable view of the space, strengthening hopes of a sustainable recovery in the second half of the year.Is The Tech Sector’s Earnings Outlook Starting to Shift?The Tech sector has been a significant growth driver in recent quarters, and we saw the same trend at play in 2024 Q4. For Q4, Tech sector earnings are expected to be up +24.6% from the same period last year on +11.4% higher revenues, the 6th quarter in a row of double-digit earnings growth.This would follow the sector’s +23.2% earnings growth on +11.9% higher revenues in 2024 Q3.The Tech sector has also been among those few sectors that have steadily enjoyed an improving earnings outlook, with estimates steadily increasing. However, the more recent data on this count shows a shift in the revisions trend.The Earnings Big PictureTotal S&P 500 earnings for the current period (2025 Q1) are currently expected to be up +6.5% from the same period last year on +3.9% high revenues.Estimates for the period have been coming down since the quarter got underway.The revisions trend is broad-based, with estimates for 15 of the 16 sectors down since the start of January (Medical is the only sector whose estimates have increased). Sectors suffering the most significant cuts to estimates include Conglomerates, Aerospace, Construction, Basic Materials, Autos, and others. Unlike other recent periods, estimates for the Tech sector have also been under pressure.The expectation is for double-digit earnings growth in each of the next two years, with the number of sectors enjoying strong growth notably expanding from the narrow base we have been seeing lately.In fact, 2025 is expected to have nearly all Zacks sectors enjoy earnings growth, with 7 of the 16 Zacks sectors expected to produce double-digit earnings growth. Unlike the last two years, when the Mag 7 group drove all or most of the aggregate earnings growth, we will have double-digit S&P 500 earnings growth in 2025, even without the contribution from this mega-cap group.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comZacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN): Free Stock Analysis Report Lowe's Companies, Inc. (LOW): Free Stock Analysis Report The Home Depot, Inc. (HD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks