When the stores reported first quarter earnings, the preponderance of guidance pointed to slower sales in the second quarter likely based on sales pulled forward into the first quarter due to warm weather. But it could be the case that falling gasoline prices are giving sales a lift in May that could continue through June. According to the latest report from Retail Metrics, retailers are on track to post a comparable store sales gain of 3.6% in May, excluding the negative effect of lost sales at Walgreen Co. (NYSE: WAG) due to its being dropped by pharmacy benefits management firm Express Scripts Inc. (NASDAQ: ESRX).

We looked at a dozen retailers with an eye toward discerning value opportunities for investors: Costco Wholesale Corp. (NASDAQ: COST), Wal-Mart Stores Inc. (NYSE: WMT), Target Corp. (NYSE: TGT), Macy’s Inc. (NYSE: M), Kohl’s Corp. (NYSE: KSS), J.C. Penney Company Inc. (NYSE: JCP), Gap Inc. (NYSE: GPS), Limited Brands Inc. (NYSE: LTD), American Eagle Outfitters Inc. (NYSE: AEO), Abercrombie & Fitch Inc. (NYSE: ANF), The TJX Companies Inc. (NYSE: TJX), and Dollar General Corp. (NYSE: DG).

Costco Wholesale Corp. (NASDAQ: COST) traded at $84.14 and has a market value of around $37 billion. The consensus target price from Thomson Reuters is $86.83 and the 52-week range is $70.22-$92.10. Costco has a dividend yield of 1.3%. The implied upside to the consensus target is just 3%, and we would note that the target is below the 52-week high.

Wal-Mart Stores Inc. (NYSE: WMT) traded at $64.65 and has a market value of around $220 billion. The consensus target price from Thomson Reuters is $65.28 and the 52-week range is $48.31-$64.88 (new high set today). Walmart has a dividend yield of 2.5%. The implied upside to the consensus target is barely 1%, but we would note that the target is still above the 52-week high.

Target Corp. (NYSE: TGT) traded at $56.84 and has a market value of around $38 billion. The consensus target price from Thomson Reuters is $63.65 and the 52-week range is $45.28-$58.95. Target has a dividend yield of 2.1%. The implied upside to the consensus target is 12%, and we note again that the target is above the 52-week high.

Earnings growth for the reporting retailers is up too, by 11.8%. Excluding Wal-Mart Stores Inc. (NYSE: WMT) due to its size, Retail Metrics reckons that its 120 retailers will show profit growth of 12.2% in the first quarter. Including Walmart, profits will rise 13.8%.

The best profit growth is expected in the recreational sector, with Dick’s Sporting Goods Inc. (NYSE: DKS) and Hibbett Sports Inc. (NASDAQ: HIBB) leading the way a 40%+ earnings gain. Home furnishing retailers are expected to post 40% gains, led by Bed Bath & Beyond Inc. (NASDAQ: BBBY) and Williams-Sonoma Inc. (NYSE: WSM). Footwear retailers are tabbed to grow profits 31%, following huge gains at Brown Shoe Co. (NYSE: BWS) and Footlocker Inc. (NYSE: FL).

The worst performing sector is projected to be consumer electronics, with teen apparel stores the only other retailing sector expected to post overall losses. Best Buy Co. Inc. (NYSE: BBY) and GameStop Corp. (NYSE: GME) are the big players here. Teen apparel retailers like Wet Seal Inc. (NASDAQ: WTSLA), Gap Inc. (NYSE: GPS), and Abercrombie & Fitch Co. (NYSE: ANF) have struggled with same-store sales and revenues, as well as earnings.

Paul Ausick

The unofficial closing bells put the DJIA down about 2 points to 12,502.66 (-0.01%), the NASDAQ fell about 8 points (-.029%) to 2,839.08, and the S&P 500 rose 0.05% or less than 1 point to 1,316.63.

There were several analyst upgrades and downgrades today, including Gap Inc. (NYSE: GPS) raised to ‘buy’ at Lazard Capital; DryShips Inc. (NASDAQ: DRYS) started as ‘buy’ at Global Hunter; Domino’s Pizza Inc. (NYSE: DPZ) reiterated as ‘buy’ with a target price of $46 at Argus; LyondellBasell Industries (NYSE: LYB) started as ‘outperform’ with a target price of $60 at Credit Suisse; and Tesla Motors Inc. (NASDAQ: TSLA) started as ‘buy’ at Maxim Group.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Autozone Inc. (NYSE: AZO) is down -1.67% at $362.40; Best Buy Co. Inc. (NYSE: BBY) is up 1.3% at $18.41 (more coverage here); Ralph Lauren Corp. (NYSE: RL) is up 3.4% at $151.24 (more coverage here); Williams Sonoma Inc. (NYSE: WSM) is up 3.4% at $35.90; and Express Inc. (NYSE: EXPR) is down -26.9% at $16.88.

Tomorrow we are scheduled to get earnings reports from American Eagle Outfitters Inc. (NYSE: AEO), Big Lots Inc. (NYSE: BIG), Hormel Foods Corp. (NYSE: HRL), NetApp Inc. (NASDAQ: NTAP), Pandora Media Inc. (NYSE: P), Suntech Power Holdings Co. Ltd. (NYSE: STP), and Trina Solar Ltd. (NYSE: TSL).

Other standouts from today include the following stocks:

Patriot Coal Corp. (NYSE: PCX) is down nearly -40% at $2.22 after posting a new 52-week low of $1.36 earlier today. The coal miner was reported to be interviewing firms to help with a restructuring. Patriot issued a non-denial denial later to stem the bleeding. More coverage here and here.

Benihana Inc. (NASDAQ: BNHN) is up 21.3% at $16.13. The restaurateur is being acquired for $296 million.

Facebook Inc. (NASDAQ: FB) is down -8.6%% at $31.12 after posting a new low of $30.98 earlier today. Shares are getting pummeled again today. We’ve started a deathwatch here and here. Just search for ‘facebook deathwatch’ to get the latest dope.

Stay tuned for Wednesday. Minneapolis Fed President Naryana Kocherlakota is giving a speech. We have also noted the following events on the schedule (all times Eastern):

7:00 a.m. – Mortgage Bankers Association purchase applications
10:00 a.m. – New home sales
10:00 a.m. – FHFA house price index
10:30 a.m. – EIA weekly petroleum status report
1:00 p.m. – 5-year note auction

Paul Ausick

ABIOMED Inc. (NASDAQ: ABMD) Cut to Neutral at Lazard Capital.

ArcelorMittal (NYSE: MT) named Bear of the Day at Zacks.

Boston Properties Inc. (NYSE: BXP) Reiterated Buy with target price of $120 at Argus.

Domino’s Pizza Inc. (NYSE: DPZ) Reiterated Buy with target price of $46 at Argus.

DryShips Inc. (NASDAQ: DRYS) Started as Buy at Global Hunter.

Forum Energy Technologies, Inc (NYSE: FET) Started as Outperform with $28.00 target price at Credit Suisse; Started as Outperform at Howard Weil; Started as Buy at Citigroup.

Gap Inc. (NYSE: GPS) Raised to Buy at Lazard Capital.

Infoblox Inc. (NYSE: BLOX) Started as Buy with $21 target at UBS.

LyondellBasell Industries (NYSE: LYB) Started as Outperform with $60.00 target at Credit Suisse.

Oaktree Capital Group, LLC (NYSE: OAK) Started as Neutral with $45.00 target at Credit Suisse; Started as Buy at Goldman Sachs; Started as Neutral at JPMorgan.

Pool Corporation (NASDAQ: POOL) raised to Bull of the Day at Zacks.

Synta Pharmaceuticals Corp. (NASDAQ: SNTA) Started as Buy at Jefferies.

Tesla Motors, Inc. (NASDAQ: TSLA) Started as Buy at Maxim Group.

Urban Outfitters (NASDAQ: URBN) Maintained as HOLD with $26 target price but lower estimates at Canaccord Genuity.

Watson Pharmaceuticals Inc. (NYSE: WPI) Reiterated Buy with $90 target as “Top Idea Post” at Canaccord Genuity.

Zipcar, Inc. (NASDAQ: ZIP) Started as Overweight at Morgan Stanley.

If you enjoyed the top analyst upgrades and downgrades, you can join our free email newsletter that includes analyst summaries each morning sent right to your inbox.  We also cover top issues such as IPOs, special financial exclusives, mergers and more. Sign up in the box below.

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JON C. OGG

The Facebook IPO, priced at $38, will raise $16 billion. (Reuters)

A new poll shows Greeks favor pro-bailout leaders who will keep the country in the eurozone. (Reuters)

Verizon’s (NYSE: VZ) wireless operations will charge more for 4G data plans. (Reuters)

Hewlett-Packard (NYSE: HPQ) to cut its workforce by 25,000 to 30,000 people. (WSJ)

The United States sets duties on Chinese solar panels. (WSJ)

Gamestop (NYSE: GME) cuts its sales forecast. (WSJ)

Though Angela Merkel’s view of austerity for the region has been challenged recently, she appears to have no interest in changing her approach. (WSJ)

Twenty venture-backed U.S. firms are now valued above $1 billion. (WSJ)

The custodian of a group of New York City pension funds wants shareholders to vote against two directors on the Chesapeake Energy (NYSE: CHK) board. (WSJ)

The Gap (NYSE: GPS) raises its sales forecasts as its turnaround finally takes hold. (WSJ)

JP Morgan (NYSE: JPM) had no treasurer in place when its CIO made risky trades. (WSJ)

Treasury yields hit their lowest level ever as a flight to quality accelerates. (WSJ)

The eurozone may have done a good job preparing for a Greek exit. (NYT)

The U.S. Post Office will consolidate 48 mail processing centers to save money. (NYT)

JP Morgan’s trading unit has $100 billion in risky assets. (FT)

Apple (NASDAQ: AAPL) may offer an iPhone with a larger screen. (Bloomberg)

In China, home prices fall and car inventories rise — more signs of a slowing economy. (Bloomberg)

Douglas A. McIntyre

So far this morning we have sales figures from Costco Wholesale Corp. (NASDAQ: COST), Target Inc. (NYSE: TGT), Macy’s Inc. (NYSE: M), Gap Inc. (NYSE: GPS), Stage Stores Inc. (NYSE: SSI), Limited Brands Inc. (NYSE: LTD), Stein Mart Inc. (NASDAQ: SMRT), Wet Seal Inc. (NASDAQ: WTSLA), Buckle Inc. (NYSE: BKE), and Zumiez Inc. (NASDAQ: ZUMZ).

Costco reported same-store sales growth of 4%, compared with a Thomson/Reuters estimate of 5.1% growth. Total sales rose 7%, and same-store sales excluding gasoline and currency effects rose 5% in April.

Target reported same-store sales growth of 1.1%, far short of an estimate of 2.8%.

Macy’s same-store sales growth came in at 1.2%, against an estimate of 1.9% growth.

Gap stores reported same-store sales fell -2% in April, compared with an estimated drop of -0.8%.

Stage Stores posted a same-store sales drop of -1%, much better than a forecast drop of -4.8%.

Limited Brands posted same-store sales growth of 6%, nicely above the estimate of 4%. The company also raised the lower end of its EPS guidance for the first quarter from $0.35 to $0.38. The top end of the range remained at $0.40.

Stein Mart posted a smaller-than-expected same-store sales drop of -1.6%, compared with the consensus estimate of -2.1%. For the first quarter same-store sales were down -0.4%.

Wet Seal reported that same-store sales dropped by -9.6% in April, compared with an estimated decline of -9%. For the first quarter, same-store sales are down -7.7% and total sales are down -5.2%.

Buckle posted same-store sales growth of 1% in April, compared with an estimate of 0.9%. Total sales grew 9.9% during the first quarter.

Zumiez reported same-store sales growth of 10.1% in April, compared with an estimate of 6.8% growth. Same-store sales for the first quarter rose 12.9% compared with the first quarter of 2011. Total sales rose 19.8% in April compared to April 2011.

Paul Ausick

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The headline of 8% same-store sales growth should have piqued interest from investors if you just read the headlines.  The problem is that Gap shares have risen to above $26.50 after closing out 2011 at $18.46.  Yep, that is a gain of more than 40% against a near-12% gain in the S&P over the first quarter and that is not normal.

Gap has been plagued by years of disappointing sales and today may be a relief news headline on the surface.  The breakdown in comparable store sales showed that Gap was up 9% in North America (versus -9% year ago), Banana Republic was up 5% in North America (versus -8% year ago), and Old Navy was up 11% in North America (versus -12% year ago).  International same-store sales rose 2% from a -9% reading a year ago.

RetailMetrics already told us earlier this week that the Gap was getting higher sales revisions. Thomson Reuters has a target of $1.84 EPS for Gap’s current fiscal year and that translates to 14.4-times expected earnings.  That is not really expensive, but it is no longer cheap when you consider a gain of more than 40% in the shares over the last quarter.

Gap shares are still considered a turnaround but investors need to know that the current share price is actually higher than it has been over any point in over ten years on a dividend-adjusted price basis.  Its market cap is back up to $13 billion as well.

The headline news looked great, but investors are likely to demand more months and quarters of outperformance against peers before they are willing to massively commit to a bet that Gap will go back and challenge its highs from over a decade ago.

Gap shares are down $0.06 at $26.59 and $26.59 is what is represented as the Thomson Reuters consensus price target as well.

JON C. OGG

Many factors are cited: an earlier Easter holiday by 16 days this year, very favorable weather conditions, improving employment, well received colorful spring merchandise assortments, rising consumer confidence, and pent up demand.

While estimates have been moving higher, Retail Metrics expects that retailers should surprise on the upside for a fourth consecutive month.  It does warn, however, that the gains in March may come at the expense of April and it also noted that retailers face a very steep 8.7% comparison with April 2011 and that makes for an uphill battle.

The report noted that (after falling over the weekend) department store forecasts turned up and now stand at 4.2%.  Macy’s, Inc. (NYSE: M), Kohl’s Corporation (NYSE: KSS), and Nordstrom Inc. (NYSE: JWN) all experienced 20 basis point upward moves to their consensus estimates.  Other gains in expectations were as follows: The TJX Companies, Inc. (NYSE: TJX) with a 130 basis point rise; Ross Stores Inc. (NASDAQ: ROST) with a full 100 basis point rise; Zumiez, Inc. (NASDAQ: ZUMZ) with a 60 basis point rise; and eve Gap Inc. (NYSE: GPS) showing a 40 basis point rise.

Buckle Inc. (NYSE: BKE) is expected to be one of the surprise reduced forecasts by 70 basis points, but its stock is with 2% of a 52-week high.  Another large reduction was an 80 basis point tempering of expectations from the Wet Seal Inc. (NASDAQ: WTSLA) and its stock has been very weak in the last year.

We should be getting most of the same-store sales reports on Wednesday and Thursday of this week ahead of the Easter weekend.

JON C. OGG

The unofficial closing bells put the DJIA up nearly 66 points to 13,211.74 (0.50%), the NASDAQ fell nearly 4 points (-0.12%) to 3,091.57, and the S&P 500 rose 0.37% or about 5 points to 1,408.46.

There were several analyst upgrades and downgrades today, including Gap Inc. (NYSE: GPS) raised to ‘buy’ at Janney; Best Buy Co. Inc. (NYSE: BBY) maintained as ‘hold’ at Argus; Lululemon Athletica Inc. (NASDAQ: LULU) started as ‘buy’ at UBS; Micron Technology Inc. (NASDAQ: MU) reiterated ‘buy’ with an $11 target price at Jefferies; and Research in Motion Ltd. (NASDAQ: RIMM) maintained as ‘underperform’ with a $12 target price at Jefferies.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: China Ming Yang Power Group Ltd. (NYSE: MY) is up 4.9% at $2.35; Research in Motion is up 6.8% at $14.67 (more coverage here); and Finish Line Inc. (NASDAQ: FINL) is down nearly -16% at $21.34 (more coverage here). After markets close today Forbes Energy Services Ltd. (NASDAQ: FES) will report earnings. Before markets open on Monday we’ll get earnings from Digital Domain Media Group Inc. (NYSE: DDMG) and Pep Boys – Manny Moe and Jack (NYSE: PBY), which is essentially meaningless now that the Pep Boys are being acquired by a private equity firm.

Other standouts from today include the following stocks:

Enphase Energy Inc. (NASDAQ: ENPH) is up more than 19% at $7.16 after posting an intra-day on its IPO day of $8.24. More coverage here.

ZaZa Energy Corp. (NASDAQ: ZAZA) is up more than 21% at $4.74. The independent oil & gas driller acquired new acreage in a liquids-rich shale play in East Texas.

Liz Claiborne Inc. (NYSE: LIZ) is up about 12% at $13.26 after posting a new 52-week high of $15.39 earlier today. The Wall Street Journal reported that the company was in takeover talks with several private equity firms for about $20/share.

Stay tuned for Monday. St. Louis Fed President James Bullard and Cleveland Fed President Sandra Pianalto are giving speeches. We have also noted the following events on the schedule (all times Eastern):

10:00 a.m. – Institute for Supply Management manufacturing index
10:00 a.m. – Construction spending
11:30 a.m. – 3- and 6-month bill auction

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Have a great weekend!

Paul Ausick