What to Expect From Target Earnings

November 15, 2016 by Chris Lange

Target Corp. (NYSE: TGT) is scheduled to release its fiscal third-quarter financial results before the markets open on Wednesday. The consensus estimates call for $0.83 in earnings per share (EPS) and $16.3 billion in revenue. In the same period of last year, the retailer posted EPS of $0.86 and $17.61 billion revenue.

This company has started to build smaller stores, to move into cities, but Wall Street does not buy the company’s overall management. Target is often considered Wal-Mart’s smaller brother, the second largest big-box retailer, but one that has struggled. Over the past year, Wal-Mart shares are up 17% and Target has lagged. Target continues to be wedged between the world’s largest retailer on one side and the extraordinarily successful Costco on the other.

Retailers have tried to launch stores that are a different size than their traditional ones. As a matter of fact, Wal-Mart did, with little success. Target does not have the brand power that retailers like Wal-Mart and Amazon do. Bigger or smaller stores likely won’t solve that problem.

A few analysts weighed in on Target ahead of the earnings report:

  • Brean Capital reiterated a Buy rating.
  • Nomura has a Hold rating with a $75 price target.
  • Jefferies has a Hold rating with a $72 price target.
  • Guggenheim has a Neutral rating.
  • Barclays has an Underweight rating with a $60 price target.
  • Credit Suisse has a Neutral rating with a $65 price target.
  • Cowen has a Market Perform rating with a $68 price target.
  • Argus has a Hold rating.

So far in 2016, Target has underperformed the broad markets, with the stock down 1.6%.

Shares of Target were down about 1% at $71.47 on Tuesday, with a consensus analyst price target of $74.28 and a 52-week trading range of $65.50 to $84.14.

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