Retail

Credit Suisse Analyst Shows the Love for Retail Stocks

Credit Suisse’s rating of Outperform and $319 price target for Home Depot are based on a forecast 23 times EPS multiple in fiscal 2022. Risks to the forecast include more moderate growth in the overall economy and could last longer than expected; investments/expenses “may be less variable than expected”; increased competition; and consumer uncertainties.

The stock traded down about 2% Wednesday morning, at $310.38 in a 52-week range of $234.31 to $345.69. The consensus price target is $337.89.

Target

Target Inc. (NYSE: TGT) stock traded up more than 4% Wednesday morning, following the release of its first-quarter earnings before the opening bell. The company beat estimates on both the top and bottom lines. EPS totaled $3.69, topping the consensus estimate of $2.02 by $1.67. Revenue totaled $23.88 billion, well above the consensus of $21.13 billion. Same-store sales rose by 22.9% year over year.

Credit Suisse based its Outperform rating and $211 price target on a multiple of 22 times expected fiscal 2022 EPS. Risks include Target’s “reliance on sales to drive EBITDA improvement,” a competitive landscape and “structural business mix challenges.”

Target stock posted a new 52-week high Wednesday morning of $218.50. The 52-week low is $114.23, and the consensus price target is $217.96.

Walmart

Since reporting first-quarter earnings Tuesday morning, Walmart Inc. (NYSE: WMT) shares have added about 2.3%, as of Wednesday morning. Credit Suisse bases its Outperform rating and $150 price target on a multiple of 25 times Walmart’s estimated fiscal year 2023 earnings-per-share (EPS) estimate. The risks to the bank’s outlook are workplace closures continuing to affect Walmart’s customers, supply chain disruptions and inventory challenges.

On Tuesday, Walmart beat consensus expectations on both the top and bottom lines, with EPS of $1.69, compared with the estimate of $1.21, and revenue of $138.3 billion, against an estimate of $131.5 billion. U.S. same-store sales were up 6% year over year. Fiscal-year EPS guidance was raised to a range of $5.00 to $5.15.

The shares traded up about 0.3% Wednesday, at $142.40 in a 52-week range of $117.01 to $1.53.66, and the consensus price target on the stock is $161.85.