Will Target Hit the Bullseye For Q3 Earnings?

November 19, 2018 by Chris Lange

Target Corp. (NYSE: TGT) is set to report its most recent quarterly results before markets open on Tuesday. Thomson Reuters has consensus estimates calling for $1.12 in earnings per share (EPS) and $17.78 billion in revenue. The same period from last year had $0.91 in EPS and $16.67 billion in revenue.

When the mega-retailer issued guidance for the third quarter and the second half of 2018, the company said it expects same-store sales growth of around 4.8% in both periods, matching growth for the first half of the year. For the quarter, the company expects adjusted EPS of $1.00 to $1.20. For all of 2018, Target lifted its adjusted EPS forecast from a range of $5.15 to $5.45 to a new range of $5.30 to $5.50.

In the most recent quarter, same-store sales rose 6.5% compared with the second quarter of 2017, the best in 13 years according to the company. Digital channel sales rose 41% and contributed 1.5 points to same-store sales growth. Store traffic rose 6.4% in the quarter, the best growth since 2008 when Target began reporting traffic numbers.

Also in this time, Target reported that its digital channel accounted for 5.6% of total sales, up from 4.2% in the second quarter of last year. For the first half of 2018, digital sales generated 5.4% of all sales, compared with 4.2% a year ago.

Excluding Monday’s move, Target has outperformed the broad markets with its stock up about 44% in the past 52 weeks. In just 2018 alone, the stock is up about 22%.

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

  • KeyCorp has an Overweight rating with a $110 price target.
  • Buckingham Research has a Buy rating with a $102 price target.
  • Cowen has an Outperform rating with a $100 price target.
  • BMO Capital Markets has a Market Perform rating with an $88 price target.
  • Citigroup has a Neutral rating with a $92 price target.
  • Deutsche Bank has a Hold rating with a $90 price target.

Shares of Target were last seen down 1.5% at $78.49, with a consensus analyst price target of $91.47 and a 52-week range of $55.25 to $90.39.

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