What to Expect From Target Earnings

August 16, 2016 by Chris Lange

Target Corp. (NYSE: TGT) is scheduled to report its fiscal second-quarter financial results before the markets open on Wednesday. The consensus estimates from Thomson Reuters call for $1.12 in earnings per share (EPS) on $16.18 billion in revenue. The retailer posted EPS of $1.22 and $17.43 billion in revenue in the same period of last year.

Early in June the board of directors announced that it had raised the quarterly dividend by 7.1%, from $0.56 to $0.60. The new dividend is payable September 10, 2016, to shareholders of record on August 17.

Target posted a revenue decline of more than 5% in its first quarter of fiscal 2016, and that took shares down 7% in one trading session. The stock basically flatlined at that level for three weeks.

Although the numbers were mixed in the first quarter, albeit with better-than-expected earnings, guidance seemingly cratered this stock. Some might attribute this to the Amazon effect, while others are seeing this as a weather-related issue.

A few analysts weighed in on Target ahead of earnings:

  • Deutsche Bank has a Hold rating.
  • Jefferies has a $72 price target.
  • Nomura has a Hold rating and a $75 price target.
  • Miller Tabak has a Buy rating and an $87 price target.
  • Piper Jaffray reiterated an Outperform rating with an $86 price target.
  • Argus reiterated a Hold rating.
  • BMO Capital Markets reiterated a Market Perform rating with a $76 price target.
  • Morgan Stanley reiterated an Underweight rating.

So far in 2016, Target has slightly underperformed the broad markets, with the stock up about 6.5%. Over the past 52 weeks, the stock is actually down 1%.

Shares of Target were trading at $75.63 on Tuesday, with a consensus analyst price target of $77.97 and a 52-week trading range of $65.50 to $84.62.

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