What to Expect When Target Reports Wednesday

August 20, 2019 by Chris Lange

Target Corp. (NYSE: TGT) is scheduled to release its fiscal second-quarter financial results before the markets open on Wednesday. The consensus estimates are calling for $1.62 in earnings per share (EPS) and $18.34 billion in revenue. The same period of last year reportedly had $1.47 in EPS and $17.78 billion in revenue.

The retailer said that it continues to demonstrate its intention not to get steamrolled by rivals Walmart or Amazon. Target announced earlier this quarter that it is rolling out a same-day delivery service from 1,500 stores in 47 states for some 65,000 items available at the store’s website.

The service comes in two flavors: a per-delivery charge of $9.99 or an annual subscription fee of $99 (following a free, four-week trial) on orders of $35 or more. Deliveries will be handled by Shipt, the company that Target paid $550 million for back in 2017.

Both Walmart and Amazon recently added next-day delivery plans, and Amazon Prime’s $119 annual subscription already includes free same-day delivery in limited areas for more than 3 million items on orders of $35 or more. Non-Prime members can receive same-day service for $9.98 per order. Walmart expects to have same-day delivery available at 1,600 U.S. stores by the end of this year.

The arms race in delivery services is all about keeping up with the competition. If Target, Walmart and Amazon are all offering the same (or nearly the same) delivery options, that gives customers one less reason to flee to a competitor. It’s all about loyalty.

Excluding Tuesday’s move, Target had outperformed the broad markets, with its stock up about 31% year to date. In the past 52 weeks, the stock is up about 5.5%.

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

  • Robert Baird has a Buy rating with a $90 price target.
  • Deutsche Bank has a Buy rating with a $99 price target.
  • Goldman Sachs has a Buy rating and a $102 price target.
  • Barclays has a Buy rating with a $95 target price.
  • Citigroup has a Neutral rating and an $80 price target.

Shares of Target traded up about 1% to $86.72 on Tuesday, in a 52-week range of $60.15 to $90.39. The consensus price target is $89.65.