Chipotle's 4Q Guidance Disappoints Investors

Chipotle reported 3Q earnings after market close, and the pre-market is indicating an opening price down 8%. The company reported 3Q EPS of $4.59, which fell slightly short of consensus estimates of $4.62. Results were short largely due to lower-than-expected operating margins. However, the investor focus was primarily on management's commentary on sales trends.

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Word on Wall Street: Home Depot's Debate Centers on Valuation

Home Depot is a widely admired company on Wall Street. Overall sentiment among Wall Street analysts is bullish, with the majority of analysts holding largely positive views on the stock. While there aren't many bears, there are analysts that believe the stock has run its course. Below are the key issues that these analysts are talking about.

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Amazon Surpasses Walmart; 2Q Exceeds Expectations

Back in mid-June, I wrote about Amazon's 38% stock increase on the heels of a strong 4Q and 1Q. Since then, AMZN reported blowout 2Q results, and the stock has increased another 34%, for a total of a 72% increase since January 29.  Amazon's market cap now stands at $250 billion, surpassing Walmart's $230 billion market cap. What has led Amazon to surpass the largest retailer in the world?

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The Risks to Bed Bath & Beyond's Online Sales Growth

Last week, I wrote about Bed Bath & Beyond's 1Q15 results and about some concerns surrounding the company's guidance for the year. Specifically, I wrote that Bed Bath & Beyond may miss its top-line guidance due to difficult comparisons. In response, some have noted that online sales should account for that 2-3% growth; if one breaks out comps by online vs. retail, the company would only need brick and mortar to break even, as it did last quarter, and for online to contribute another 2-3% to comps. 

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LOW Presents an Interesting Opportunity - If You Believe Management

While its sexier competitor Home Depot gets all the attention, LOW is an interesting play at current levels. Lowe's currently trades at a similar multiple to Home Depot despite having a stronger outlook on earnings. The key to the story is whether LOW will be able to achieve its guidance (set forth by management) for the year.

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Bed Bath & Beyond's 1Q15 Results Once Again Pressured

Bed Bath and Beyond reported 1Q15 results that were slightly below consensus expectations. Revenue once again grew at the low end of expectations and operating margin declined at a greater rate than expected. As I wrote in the past, Bed Bath & Beyond's bear thesis has largely played out as the company has suffered from increasing competition. Moving forward, it's difficult to see what might provide a boost to their top-line revenue or reverse the profitability declines. 

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What to Expect When BBBY Reports 1Q15 Results

BBBY reports 1Q15 results after market close on Wednesday, June 24th. Recall that I outlined the bear case in February, which has thus far largely played out. Here's what professional investors are expecting.

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Valuation - Why Multiples Are Used More Frequently Than DCFs

One of the most common questions that I get is why my models use multiples rather than a DCF for valuation. Personally, I believe a lot of people are too focused on DCFs. There's a common perception that professionals use complex DCFs with big finance terms while amateurs do third-grade math to get to a price target. It's not about which is more difficult or complex; it's about which method weighs the inputs appropriately given our certainty on the future of the company. 

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Bed Bath and Beyond's 4Q Disappoints; Potential 1Q Concerns for Other Retailers Highlighted

Bed Bath and Beyond reported 4Q (ending February) yesterday after market close that were in line with consensus estimates, but were worse than they appeared. Primarily, sales were below expectations, and profitability (operating margin) continues to be pressured. Additionally, management's guidance points to just moderate sales growth and continued margin pressure in 2015. As I detailed in a prior post, Bed Bath & Beyond sales and earnings growth is slowing as competition heats up. Management's heavy share repurchases provide some downside protection, but the deteriorating fundamentals are likely to limit any share price appreciation moving forward. 

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Underlying Housing Market Remains a Positive for Home-Related Stocks

As I've written in the past, a strong housing market drives results for home-related retailers like Home Depot, Lowe's, Restoration Hardware, Target, and Bed Bath and Beyond. Over the last two days, we've received existing home sales and new home sales data showing continued strength in the housing market. As we move into the all-important spring season, strong housing data should bode well for home-related companies.

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Home Depot's Risk/Reward Becoming More Balanced After Solid 2014

Home Depot recently reported 4Q results that were above expectations and were well received by investors. The company is executing at a high level and appears to have all of the momentum behind it. However, with the stock up 41% over the last year, Home Depot's stock no longer appears to be an obvious buy as the risk/reward starts to balance out. I'll discuss the details and other thoughts on the strong quarter below.

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