Target (NYSE:TGT) is expected to report fiscal fourth quarter earnings on Wednesday, February 27th. The whisper number is $1.52, four cents ahead of the analysts' estimate. TGT has a 75% positive surprise history (having topped the whisper in 27 of the 36 earnings reports for which we have data).
- Beat whisper: 27 qtrs
- Met whisper: 0 qtrs
- Missed whisper: 9 qtrs
Our primary focus is on post earnings price movement. Knowing how likely a stock's price will move following an earnings report can help you determine the best action to take (long or short). In other words, we look at what happens when the company beats or misses the whisper number expectation.
The table below indicates the average post earnings price movement within a one and 30 trading day timeframe:
The strongest price movement of -2.5% comes within 30 trading days when the company reports earnings that beat the whisper number, and +3.8% within ten trading days when the company reports earnings that miss the whisper number (opposite reactor).
The table below indicates the most recent earnings reports and short-term price reaction:
Attention from investors over the past few years has been inconsistent. The company has only had a whisper number in four of the past eight quarters. The last three reports with a whisper number were May, 2011, November 2011, and August 2012. All three reports topped the whisper number, and all three resulted in short term price weakness. Historical data and these recent reports suggest the stock is an 'opposite' price reactor - sees strength when it misses expectations, and weakness when it beats.
Enter your expectation and view more earnings information here, or let us know your expectation in the comments section below.
Since 1998, WhisperNumber.com has been tracking and publishing "crowd sourced estimates" for earnings. We call these earnings expectations whisper numbers. Our whisper numbers are gained from individual investors and traders just like you that have registered with our site. While the whisper number itself is an important part of our analysis, a company's "price reaction" to beating or missing the whisper number expectation is the key. On average, companies that exceed the whisper are "rewarded," while companies that miss are "punished" following an earnings report.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.