Minneapolis, Minnesota-based Target Corporation (TGT) owns and operates general merchandise stores. Valued at $68.8 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. The retail giant is expected to announce its fiscal third-quarter earnings for 2024 on Wednesday, Nov. 20.
Ahead of the event, analysts expect TGT to report a profit of $2.28 per share on a diluted basis, up 8.6% from $2.10 per share in the year-ago quarter. The company beat the consensus estimates in three of the last four quarters while missing the forecast on another occasion.
For the full year, analysts expect TGT to report EPS of $9.53, up 6.6% from $8.94 in fiscal 2024. Its EPS is expected to rise 10.8% year over year to $10.56 in fiscal 2026.
TGT stock has underperformed the S&P 500’s ($SPX) 41.7% gains over the past 52 weeks, with shares up 38% during this period. However, it outperformed the Consumer Staples Select Sector SPDR Fund’s (XLP) 20.8% gains over the same time frame.
TGT's underperformance is due to consumers focusing on budget management and seeking value, leading to potential softening demand for non-essential items. This poses a risk to sales growth, despite efforts to offer compelling value. Inventory mismanagement has also impacted gross margin and profitability. Concerns about consumer spending, bloated inventory, and inflation have contributed to the stock's underperformance, as Target is reliant on consumer spending and susceptible to economic cycles.
On Aug. 21, TGT shares closed up more than 10% after reporting its Q2 results. Its revenue increased 2.6% year over year to $25 billion. The company’s adjusted EPS of $2.57 was better than the consensus of $2.18. For Q3, it expects its adjusted EPS to be between $2.10 and $2.40. TGT expects full-year adjusted EPS to be between $9 and $9.7.
Analysts’ consensus opinion on TGT stock is reasonably bullish, with a “Moderate Buy” rating overall. Out of 33 analysts covering the stock, 17 advise a “Strong Buy” rating, three suggest a “Moderate Buy” rating, 12 give a “Hold” rating, and one recommends a “Strong Sell.” TGT’s average analyst price target is $177.28, indicating a potential upside of 19.8% from the current levels.
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.
