Zacks Earnings Preview: Deere & Co., Home Depot, Target, Aeropostale and Gap Inc.

CHICAGO--(Business Wire)--
Zacks.com releases the list of companies likely to issue earnings surprises.
This week`s list includes Deere & Co. (NYSE: DE), Home Depot (NYSE: HD), Target
(NYSE: TGT), Aeropostale (NYSE: ARO) and Gap Inc. (NYSE: GPS). To see more
earnings analysis, visit http://at.zacks.com/?id=3207.

Every day, Zacks.com makes 4 stock picks available, free of charge. To see them,
go to http://at.zacks.com/?id=3567.

The Week's Events

First-quarter earnings season nears an end with Deere & Co. (NYSE: DE), Home
Depot (NYSE: HD) and Target (NYSE: TGT) reporting. Joining them will be 15 other
members of the S&P 500. In total, we have confirmed reports from 124 companies.

There is not much on the economic calendar, though the minutes from the April
Fed meeting will be released on Wednesday afternoon (2 p.m.).

* Tuesday: April building permits and housing starts
* Wednesday: April Fed minutes, weekly crude inventories
* Thursday: Phili Fed survey, April Leading Indicators, weekly initial jobless
claims

Fed Chairman Ben Bernanke will deliver a commencement speech at the Boston
College Law School on Friday afternoon. Vice Chairman Donald Kohn will speak at
a conference about fiscal policy in Princeton, N.J. on Saturday afternoon.

Volume could be light on Friday as traders and fund managers leave early for the
holiday weekend. The U.S. markets will be closed on Monday, May 25.

The end of first-quarter earnings season removes a catalyst for the bulls. Given
that stocks have rallied for 8 out of 10 weeks, a pullback is overdue and I
think it has started.

Companies That Could Issue Positive Earnings Surprises

Despite the recession, Aeropostale (NYSE: ARO) continues to enjoy strong growth.
April same-store sales surged 20%, leading the company to hike its first-quarter
guidance by 14 cents to 46 cents per share. Brokerage analysts are even more
bullish and think the casual clothing retailer could announce profits of 48
cents per share. ARO has topped expectations during 3 out of the last 4
quarters. Aeropostale is scheduled to report on Thursday, Apr 21, after the
close of trading.

Though same-store sales continue to fall, Gap Inc. (NYSE: GPS) recently said
that first-quarter earnings would top expectations. The company guided for
profits of 29 to 30 cents per share, 6 cents more than what brokerage analysts
were projecting in early May. (Revisions by 11 of the 19 covering analysts have
since pushed the consensus earnings estimate up to 30 cents per share.) GPS has
a long track record of topping expectations. GAP is scheduled to report on May
21, after the close of trading.

About one-quarter of the covering brokerage analysts have raised their
fourth-quarter estimates on Home Depot (NYSE: HD) in recent weeks. The revisions
have nudged the consensus earnings estimate a penny higher to 28 cents per
share. The most accurate estimate is more bullish at 30 cents per share. The
home improvement retailer has topped expectations for 4 consecutive quarters.
Home Depot is scheduled to report on Tuesday, May 19, before the start of
trading.

Target (NYSE: TGT) recently predicted that its first-quarter earnings would be
"well above" the consensus estimate. Brokerage analysts quickly adjusted their
models, sending the consensus earnings estimate up to 60 cents per share - an
increase of 11 cents from 30 days ago. The most accurate estimate is slightly
more bullish at 61 cents per share. This is a riskier call, however, because TGT
does not have a good history of topping expectations. Target is scheduled to
report on Wednesday, May 20, before the start of trading.

Companies That Could Issue Negative Earnings Surprises

Deere & Co. (NYSE: DE) has missed expectations for 4 consecutive quarters.
Analysts seem to be bracing for another miss as is evident by the recent 2-cent
drop in the consensus earnings estimate. The average fiscal second-quarter
forecast now calls for profits of $1.10 per share. The most accurate estimate is
more bearish at a $1.07 per share. Deere is scheduled to report on Wednesday,
May 20, before the start of trading.

Charles Rotblut, CFA, is the senior market analyst for Zacks.com.

Want to turn earnings surprises into quick profits? Learn how by visiting
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