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.

Wall St. has abandoned MSO shares because consumers have abandoned the firm’s products. Shares trade just over $3, down from more than $18 five years ago. That gives the company a market capitalization of only $207 million. Another sign of investor disinterest is that the stock trades, on average, less that 150,000 shares a day.

Investors lack interest for one simple reason: MSO has lost money four calendar years in a row. Revenue in 2007 was $328 million. Last year, that number fell to $221 million. First-quarter figures continued the trend. Revenue fell to $49.8 million from $52.7 million in the same period a year ago. The company had a net loss of $3.6 million.

MSO has attempted to build its some of its business on a series of partnerships with retailers and other companies that sell goods to consumers. The most recent misstep in this direction was a deal with JCPenney (NYSE: JCP) made in January. JCPenney invested $16.6 million in MSO and set a housewares partnership between the two companies. Macy’s (NYSE: M) challenged the deal because it claims to have an exclusive relationship with Martha Stewart Living. The fight has become less important that the original decision. Macy’s is healthy. JCPenney is a wreck that lost 20% of its sales last quarter. Under new CEO Ron Johnson, JCPenney will be lucky to remain a viable competitor in its range of the department store industry.

It is impossible to say with any conviction what happened to Martha Stewart Omnimedia. Its founder was once an important consumer brand on her own. That period is now nearly five years gone.

Douglas A. McIntyre

Yahoo! (NASDAQ: YHOO) had a change forced on it. Whether Scott Thompson, who was chief executive for four months, would have done well as a new leader of a troubled company will never be known. There is at least a chance he might have succeeded, if the scandal about his resume had not occurred. The board of Yahoo! did not get the opportunity to evaluate his tenure because he had none.

Two examples of CEOs who have been hired and supported by their boards despite very poor results are Ron Johnson of JCPenney (NYSE: JCP) and Stephen Elop of Nokia (NYSE: NOK). Elop has run the large handset company since September 2010. Johnson has only run Penney for a little longer than a quarter.

Elop followed Olli-Pekka Kallasvuo as chief executive. Kallasvuo was blamed because he could not transform Nokia into a successful manufacturer of smartphones. He may have stayed with the Symbian operating system, which lost popularity as Google’s (NASDAQ: GOOG) Android and Apple’s (NASDAQ: AAPL) iPhone gained market share. Elop, the Nokia board reasoned, could rely on his years as a the head of Microsoft’s (NASDAQ: MSFT) business division, although the link between that job and being the head of a handset company is difficult to understand.

Johnson’s promise as a turnaround CEO for JCPenney at least had a foundation in the success he had in his former job as head of Apple’s retail division, although some critics believe that Apple would have done well in retail no matter who was in charge. The demand for Apple products assured that. But JCPenney had been nearly ruined by former CEO and chairman Myron E. Ullman III. His strategy to make the retailer a better competitor to companies such as Macy’s (NYSE: M) and Nordstrom (NYSE: JWN) did not advance JCPenney. The company’s board gambled that Johnson could do better.

Elop made one bet on a turnaround of Nokia, and it may have been his best and only chance. He tethered his company’s success to that of Microsoft and its troubled Windows Mobile OS. At least Microsoft had the cash and marketing muscle to press its software into the market, although those efforts have been failures in the past. Elop’s decision did almost nothing for Nokia, at least based on the results from the last year. Nokia’s revenue collapsed along with its market share in smartphones. Microsoft was no help at all. The Nokia board is left to decide whether Elop made the wrong decision, or whether Nokia is doomed along with other companies that have been crushed by Google and Apple: Sony Ericsson, LG and Motorola. Nokia’s future may have been set long before Elop joined. There is no reason to replace him. Who can do any better?

Johnson’s situation is another matter. He decided that JCPenney could only do well if he utterly and completely changed how the retailer brought in customers and turned them into buyers. He rebranded the retailer “JCP.” JCPenney now has three basic tiers of pricing, which are supposed to make it easier for shoppers to decide the value of products sold by the company. The results of the most recently reported quarter show the strategy has not paid off. JCPenney’s same-store sales fell an astonishing 20% and online sales dropped more than 27%. If the results for the current quarter are similar, it will be clear that Johnson’s plan has failed, or that JCPenney has been a failure for some time. The board will have to face the fact that it picked the wrong candidate or that JCPenney cannot survive in its current form in competition with several other larger retailers and e-commerce firms led by Amazon.com (NASDAQ: AMZN). As with Nokia, the battle may have been lost long before the new CEO took up the reins.

The boards of Nokia and JCPenney may as well be passive as their new CEOs preside over companies that continue to fall apart. Neither had any chance of succeeding no matter who was put in charge.

Douglas A. McIntyre

Banco Bilbao Vizcaya Argentaria (NYSE: BBVA) Cut to Sell at Societe Generale.

Eastman Chemical Co. (NYSE: EMN) named Bull of the Day at Zacks.

First Republic Bank (NYSE: FRC) Started as Overweight at JPMorgan.

Jetblue Airways (NASDAQ: JBLU) Cut to Neutral at Stern Agee.

Kirkland’s, Inc. (NASDAQ: KIRK) named Bear of the Day at Zacks.

Macy’s Inc. (NYSE: M) named as Value stock of the day at Zacks.

NetSuite Inc. (NYSE: N) Raised to Conviction Buy List at Goldman Sachs.

NextEra Energy, Inc. (NYSE: NEE) Raised to Outperform at Baird.

Nokia Corporation (NYSE: NOK) Cut to Sell at Soc-Gen.

Repblic Services Inc. (NYSE: RSG) Cut to Neutral at Wedbush Morgan.

Splunk, Inc. (NASDAQ: SPLK) Started as Buy at BofA/ML; Started as Equal-weight at Morgan Stanley; Started as Neutral at UBS; Started as Outperform at Credit Suisse.

Symantec Corporation (NASDAQ: SYMC) Cut to Sell at Goldman Sachs.

Teradata Corporation (NYSE: TDC) Raised to Overweight at Barclays.

Tumi Holdings, Inc. (NYSE: TUMI) Started as Buy at Jefferies; Started as Outperform at William Blair; Started as Neutral at Credit Suisse.

Vertex Pharmaceuticals Inc. (NASDAQ: VRTX) Raised to Overweight at JPMorgan.

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JON C. OGG

Macy’s Inc. (NYSE: M) reported earnings earlier this week and beat estimates on both the top and bottom lines. The company’s stock still got beaten down on a weak forecast, and that is what happened to both Nordstrom and Kohl’s as well. Saks Inc. (NYSE: SKS) reports next Wednesday and the consensus estimates call for EPS of $0.18 on revenues of $764.4 million. J.C. Penney Co. Inc. (NYSE: JCP) also reports next Wednesday and is expected to post an EPS loss of -$0.10 on revenues of $3.48 billion.

A beat, though, doesn’t look like it will mean much. What matters now to investors is guidance. Macy’s guided full-year EPS below the consensus estimate and got whacked. Kohl’s guided second-quarter EPS to $0.96-$1.02, below the consensus estimate of $1.11. Nordstrom reiterated its full-year EPS guidance at $3.30-$3.45, below the consensus estimate of $3.48. That’s just not good enough. Dillard’s did the smart thing and did not offer any information on guidance.

Kohl’s shares are down -0.4% just before noon today, at $48.47 in a 52-week range of $42.14-$57.39. Nordstrom’s shares are down -2.8% at $52.02 in a 52-week range of $37.28-$57.75.

Dillard’s shares are up 8.3% at $71.70, after posting a new 52-week high of $71.97 earlier this morning. The previous range was $38.99-$67.22. Dillard’s same-store sales report for May could reinforce the company’s new growth pattern — or turn it south again. Dillard’s offered no hints, so all’s well today.

Paul Ausick

The unofficial closing bells put the DJIA down nearly 97 points to 12,835.44 (-0.75%), the NASDAQ fell more than11 points (-0.39%) to 2,934.71, and the S&P 500 fell 0.67% or more than 9 points to 1,354.61.

There were several analyst upgrades and downgrades today, including American International Group Inc. (NYSE: AIG) raised to ‘buy’ at Goldman Sachs; ConocoPhillips (NYSE: COP) resumed as ‘neutral’ at Credit Suisse; The Hershey Co. (NYSE: HSY) raised to ‘buy’ at Argus; Phillips 66 (NYSE: PSX) started as ‘outperform’ at Credit Suisse; and Demand Media Inc. (NYSE: DMD) raised to ‘buy’ at Citigroup.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: AOL Inc. (NYSE: AOL) is up 3.8% at $26.55; Agrium Inc. (NYSE: AGU) is down -2.2% at $82.69 (more coverage here); Dollar Thrifty Automotive Group Inc. (NYSE: DTG) is up 0.2% at $80.68; Macy’s Inc. (NYSE: M) is down -3.6% at $38.07 (more coverage here); Melco Crown Entertainment Ltd. (NASDAQ: MPEL) is down -0.2% at $13.96; Toyota Motor Corp. (NYSE: TM) is up 3.1% at $80.58; and SodaStream International Ltd. (NASDAQ: SODA) is up 28% at $37.35.

On Wednesday we are scheduled to get earnings from AMC Networks Inc. (NASDAQ: AMCX), ArcelorMittal (NYSE: MT), Express Scripts Holding Co. (NASDAQ: ESRX), Molycorp Inc. (NYSE: MCP); Nordstrom Inc. (NYSE: JWN); Nuance Communications Inc. (NASDAQ: NUAN); Harvest Natural Resources Inc. (NYSE: HNR); Kohl’s Corp. (NYSE: KSS); and Pacific Ethanol Inc. (NASDAQ: PEIX).

Other standouts from today include the following stocks:

Cost Plus Inc. (NASDAQ: CPWM) is up 21.9% at $21.92 after posting a new 52-week high earlier today. The company is being acquired by Bed Bath & Beyond Inc. (NASDAQ: BBBY) for $495 million.

Amyris Inc. (NASDAQ: AMRS) is down -21.7% at $1.98 after posting a new 52-week low of $1.89 earlier today. The biofuels and biotech company posted much higher-than-expected shortfalls in both EPS and revenues.

Arch Coal Inc. (NYSE: ACI) is up 10.1% at $8.37. The coal miner had no news today, but investors are piling in at a very low price. Volume today topped 25 million shares, more than double Arch’s daily average.

Stay tuned for Thursday. Fed Chairman Ben Bernanke and Minneapolis Fed President Naryana Kocherlakota are giving speeches. We have noted the following events on the schedule (all times Eastern):

• 8:30 a.m. – International trade report
• 8:30 a.m. – New claims for unemployment benefits
• 10:30 a.m. – EIA weekly natural gas storage report
• 1:00 p.m. – 30-year note auction
• 2:00 p.m. – Treasury budget
• 4:30 p.m. – Federal Reserve balance sheet and money supply

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Paul Ausick

The company leads off earnings seasons for a number of big department stores, all of which will be announcing results in the next couple of weeks. Nordstrom Inc. (NYSE: JWN) reports earnings tomorrow and is expected to post EPS of $0.75 on revenue of $2.52 billion. Kohl’s Corp. (NYSE: KSS) also reports tomorrow, and the consensus estimate for EPS is $0.61 and for revenue the estimate is $4.25 billion. Saks Inc. (NYSE: SKS) reports next Wednesday and the consensus estimates call for EPS of $0.18 on revenues of $764.4 million. J.C. Penney Co. Inc. (NYSE: JCP) also reports next Wednesday and is expected to post an EPS loss of -$0.10 on revenues of $3.48 billion. Dillard’s Inc. (NYSE: DDS) has not yet scheduled its announcement, but the estimates call for EPS of $1.67 on revenue of $1.53 billion.

Macy’s grew EPS by 43%, from $0.30 a year ago to $0.43 in the first quarter of 2012. Sales rose 4.4% year-over-year, from $5.89 billion to $6.15 billion. The consensus estimates called for EPS of $0.40 on revenue of $6.13 billion.

Where Macy’s failed to impress was its outlook for full-year EPS. The company reiterated guidance of $3.25-$3.30. The consensus estimate had been $3.41. Same-store sales in April were also a weight, rising just 1.2%, well below the consensus estimate for 1.9% growth.

Macy’s cost of sales rose slightly and margins fell slightly, from 39.1% to 38.8%. Strong sales in March due to an early Easter and warm weather did not flow into April as consumers grew more cautious about purchases.

The company’s shares are down -4.3% at $37.70 in pre-market trading this morning, within a 52-week range of $22.66-$42.17.

Paul Ausick

The unofficial closing bells put the DJIA down more than 76 points to 12,932.01 (-0.59%), the NASDAQ fell more than 11 points (-0.39%) to 2,946.27, and the S&P 500 fell -0.43% or nearly 6 points to 1,363.71.

There were several analyst upgrades and downgrades today, including Ford Motor Co. (NYSE: F) maintained as ‘buy’ with a target price of $19 at Argus; Wynn Resorts Ltd. (NASDAQ: WYNN) maintained ‘outperform’ with a target price of $166 at Credit Suisse; Capital One Financial Corp. (NYSE: COF) raised to ‘hold’ at Argus; BP plc (NYSE: BP) cut to ‘underweight’ at Barclays; and Synacor Inc. (NASDAQ: SYNC) cut to ‘underperform’ at BofA/ML.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Charter Communications Inc. (NASDAQ: CHTR) is down up 5.5% at $65.24 after posting a new 52-week high of $66.18 earlier today (more coverage here); Hecla Mining Co. (NYSE: HL) is up 4.1% at $4.04 (more coverage here); OfficeMax Inc. (NYSE: OMX) is up 10.5% at $4.85; Tenet Healthcare Corp. (NYSE: THC) is up 1.4% at $5.11; The Wendy’s Co. (NASDAQ: WEN) is down -4.3% at $4.66 (more coverage here); Rosetta Stone Inc. (NYSE: RST) is up 18.4% at $12.64; and Pioneer Drilling Co. (NYSE: PDC) is up 5.5% at $8.03.

On Wednesday we are scheduled to get earnings from AOL Inc. (NYSE: AOL), Agrium Inc. (NYSE: AGU), CenturyLink Inc. (NYSE: CTL), Dollar Thrifty Automotive Group Inc. (NYSE: DTG), Macy’s Inc. (NYSE: M), Melco Crown Entertainment Ltd. (NASDAQ: MPEL), News Corp. (NASDAQ: NWS), Cisco Systems Inc. (NASDAQ: CSCO), Tesla Motors Inc. (NASDAQ: TSLA), Toyota Motor Corp. (NYSE: TM), and priceline.com Inc. (NASDAQ: PCLN).

Other standouts from today include the following stocks:

Fossil Inc. (NASDAQ: FOSL) is down -36.8% at $79.50. The fashion accessories company revealed a weak forecast today. More coverage here.

Dendreon Corp. (NASDAQ: DNDN) is down -24.6% at $8.81. The drug maker’s earnings were not as strong as expected. More coverage here.

Avalon Rare Metals Inc. (AMEX: AVL) is down -24% at $1.67 after posting a new 52-week low of $1.58 earlier today. The rare earths miner is delaying a feasibility study. More coverage here.

Stay tuned for Wednesday. Cleveland Fed President Sandra Pianalto and Philadelphia Fed President Charles Plosser are giving speeches. We have noted the following events on the schedule (all times Eastern):

• 10:00 a.m. – Wholesale trade report
• 10:30 a.m. – EIA weekly petroleum status report
• 1:00 p.m. – 10-year note auction

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Paul Ausick

Johnson also made several mistakes early on. The first is that the “price value” proposition made to shoppers is very complex. Some merchandise is labeled as “everyday value.” Johnson created two other discount ranges. One of these changes monthly. The other offers steep cuts in prices every first and third Friday. That is a lot for a consumer to follow, at least among those who are casual shoppers.

Johnson also set a merchandise deal with an 16.6% investment in Martha Stewart Omnimedia (NYSE: MSO). He must not have done much due diligence about Stewart’s existing deals with retailers. Macy’s promptly sued to block the arrangement. It claimed it had a preexisting one that prevented a deal with JCPenney. Johnson looked like a fool. In addition, the Stewart brand is considered old and worn out. Its value was questionable even before the Macy’s action.

Ron Johnson has been unable to convince investors that the obvious is not true. The turnaround of a major retail chain in an already crowded market of successful companies and in the midst of an e-commerce onslaught is impossible. The JCPenney stock price now reflects that realization. All of the gains made when Johnson joined have been lost. JCPenney’s share price is back where it was before his appointment was announced.

Douglas A. McIntyre

The top earnings we are looking at are as follows: Dendreon Corporation (NASDAQ: DNDN); Electronic Arts Inc. (NASDAQ: EA); Rackspace Hosting Inc. (NYSE: RAX); The Walt Disney Co. (NYSE: DIS); Cisco Systems, Inc. (NASDAQ: CSCO); Macy’s Inc. (NYSE: M); Priceline.com Incorporated (NASDAQ: PCLN); and Nuance Communications Inc. (NASDAQ: NUAN).

We have taken estimates and price targets from Thomson Reuters consensus estimates and have added in color on each.

The shape of the biotech sector is likely to hinge based on the earnings of Dendreon Corporation (NASDAQ: DNDN).  VIVUS Inc. (NASDAQ: VVUS) also reports on Monday but Dendreon has many things that biotech investors want: a product on the market, a controversial story, a stock way off its post-approval highs, a history of soft sales with the promise of better times ahead, and a rather large short interest.  This is a sales story rather than an earnings story: Thomson Reuters expects sales of $81.2 million for the last quarter, $90.1 million for the quarter ahead (the quarter we are in now, and $378.3 million in 2012.  These sales are all from Provenge for late-stage prostate cancer.  This is the one that will set the tone for biotech during the week and this stock is back down closer to $11 after having popped to $15 from $8 earlier this year.

Electronic Arts Inc. (NASDAQ: EA) is no longer the leading game company for investors, but it is one of the largest game makers in the world.  Its earnings are also ahead of the larger video game giant Activision Blizzard Inc. (NASDAQ: ATVI) which reports later in the week.  This is also considered one of the throw-away quarters of the video game sector.  Thomson Reuters expects E.A. to report $0.17 EPS on $959.56 million in sales, with next quarter expected to be -$0.32 EPS on $580.9 million in sales.  This will mark the year-end report and the growth in the year ahead is expected to go to $1.13 EPS from $0.84 EPS expected and sales are expected to grow to $4.5 billion from $4.17 billion expected.