Minneapolis, Minnesota-based Target Corporation (TGT) owns and operates general merchandise stores. Valued at $61.93 billion by market cap, the company focuses on merchandising operations, which include general merchandise and food discount stores and a fully integrated online business. TGT also offers credit to qualified applicants through its branded proprietary credit cards.
Shares of this retail giant have underperformed the broader market over the past year. TGT has gained 2.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 17%. In 2024, TGT stock is down 4.9%, while the SPX is up 9.9% on a YTD basis.
Narrowing the focus, TGT’s underperformance is also apparent compared to the S&P 500 Cons Staples Sector SPDR (XLP). The exchange-traded fund has gained about 4.3% over the past year. The ETF’s 9% returns on a YTD basis outshine the stock’s losses over the same time frame.
On Jun. 24, TGT shares closed up more than 2% after the company announced that it would partner with Shopify Inc. (SHOP) to offer a selection of its popular merchants and their products and expand its marketplace for third-party merchants, Target Plus. This will give consumers more options to explore at affordable prices and exceptional quality.
On May 22, TGT shares closed down more than 8% after reporting its Q1 results. Its adjusted EPS of $2.03 missed Wall Street expectations of $2.05. The company’s revenue was $24.53 billion, exceeding Wall Street forecasts of $24.52 billion. For Q2, TGT expects its comparable sales to increase up to 2% and expects adjusted EPS to be between $1.95 and $2.35, the midpoint below the consensus of $2.19.
The company expects its full-year comparable sales to rise up to 2% and expects adjusted EPS to be between $8.60 and $9.60. TGT is projected to experience an 8.4% revenue decline in fiscal 2025, followed by a slight increase of 3.6% in fiscal 2026.
For the current fiscal year, ending in January, analysts expect TGT’s EPS to grow 4.3% to $9.32 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing the forecast on another occasion.
Among the 31 analysts covering TGT stock, the consensus rating is a “Moderate Buy.” That’s based on 16 “Strong Buy” ratings, three “Moderate Buys,” 11 “Holds,” and one “Strong Sell.”
This configuration is slightly more bullish than three months ago, with 15 suggesting a “Strong Buy” and four advising “Moderate Buy.”
Recently, JPMorgan maintained a “Neutral” rating on TGT stock and lowered the price target from $165 to $153, implying a potential upside of 14.3% from current levels.
The mean price target of $174.53 represents a 30.4% premium to TGT’s current price levels. The Street-high price target of $210 suggests an ambitious upside potential of 56.9%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
