TGT, LOW, TJX: Options Traders Bet Big on Retail Giant’s Earnings Volatility Tomorrow
Wall Street's derivatives desks are buzzing as options activity spikes ahead of retail earnings season.
Market Makers on Edge
Implied volatility surfaces show traders positioning for outsized moves in one major retailer's stock. The options market signals potential 8-12% swings post-earnings—significantly above historical averages.
Gamma exposure building across weekly expiries suggests market makers could amplify price movements through hedging activities. Street sentiment appears divided between bulls betting on consumer resilience and bears anticipating margin compression.
Retail Sector Under Microscope
All eyes on inventory management and guidance revisions as consumer spending patterns shift. The sector's performance could signal broader economic trends—or just another case of traders overcomplicating what customers actually want to buy.
Tomorrow's numbers will determine whether these sophisticated bets pay off or become expensive lessons in predicting unpredictable markets.
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According to options pricing, Target is expected to MOVE the most, with implied volatility suggesting a potential swing of 9.56% in either direction following its earnings release. That is much higher than the expected moves for Lowe’s of about 4.5% and 4% for TJX.
Why Target Is in the Spotlight
For its upcoming Q3 earnings report, Target is expected to report a year-over-year decline in both revenue and earnings per share. The consensus estimates stand at about $25.33 billion in revenue and $1.71 in EPS.
Target has had a rough year as the stock is down more than 32% year-to-date. The company is struggling with cautious consumer spending on discretionary items and rising competition.
With the holiday season coming up, signs of stronger demand or margin recovery could lift the stock. On the other hand, weak forecasts or inventory pressure could push it down further.
Here’s What to Expect from Lowe’s and TJX
Lowe’s is expected to post $2.97 in EPS on $20.83 billion in revenue, according to consensus estimates. The home improvement giant has managed to maintain steady performance despite cooling demand in the housing sector.
Investors will be watching for updates on the performance of strategic initiatives, such as the acquisition of FBM, which aims to boost performance with professional customers.
At the same time, TJX Companies, the parent of T.J. Maxx and Marshalls, is expected to report $1.23 in EPS on $14.85 billion in revenue. With off-price retail continuing to attract budget-conscious shoppers, TJX stock has gained over 22% so far this year.
Which Retail Stock Is a Better Buy?
Using the TipRanks Stock Comparison tool to see how Wall Street analysts are rating Target, Lowe’s, and TJX, and which retailer they believe has the strongest upside.
