Target Corporation (NYSE: NYSE:TGT) has received a reaffirmed Buy rating and a $180.00 price target from a major financial institution. The retail giant reportedly surpassed earnings per share (EPS) expectations, which was attributed to strong sales and gross margin (GM) performance.
Additionally, the company's selling, general, and administrative expenses (SG&A) aligned with consensus estimates, which marked a notable difference from the first quarter.
Target has also updated its full-year earnings guidance, raising it from the previous range of $8.60 to $9.60 to a new forecast of $9.00 to $9.70. This new guidance surpasses the consensus estimate of $9.23. Management anticipates comparable store sales (comps) to be in the lower half of its full-year 2024 guidance, which ranges from 0 to +2%. This is in line with consensus expectations of a +0.1% increase and suggests that second-half comps are expected to remain within the 0 to +2% range.
For the third quarter, Target's guidance is in line with consensus estimates, although the implied guidance for the fourth quarter is slightly below consensus. This conservative outlook may be interpreted as management's cautious stance, and it has led to a slight downward adjustment in the implied guidance for the second half of the year.
Furthermore, after a downturn since the second quarter of 2023, customer traffic improved significantly, rising to +3.0%. Based on these positive developments, expectations are set for the stock to see a substantial increase.
In other recent news, Target Corporation has seen its earnings per share (EPS) surge to $2.57, outpacing the estimated $2.33. This performance, coupled with a 2% rise in comparable sales, has led to an upward revision in its annual profit forecast for 2024. The company now expects a profit range of $9.00 to $9.70 per share, up from the earlier projection of $8.60 to $9.60.
Analysts from Jefferies, Truist Securities, and Roth/MKM have maintained their ratings on Target, acknowledging the company's robust second-quarter performance. Jefferies has reiterated its Buy rating, while Truist Securities and Roth/MKM have maintained their Hold and Neutral ratings, respectively.
In addition, BofA Securities, Telsey Advisory Group, and Morgan Stanley (NYSE:MS) have reiterated their positive ratings on Target, emphasizing the company's successful strategies and financial health. The recent developments at Target Corporation suggest a positive trend in its operational efficiency and resilience in the current economic environment.
InvestingPro Insights
Following the recent performance review of Target Corporation (NYSE:TGT), current InvestingPro data and tips provide additional insights into the retailer's financial health and market position. Target's market cap stands at approximately $66.77 billion, reflecting its significant presence in the market. The company's P/E ratio, at 16.1, indicates that the stock is trading at a reasonable valuation relative to near-term earnings growth. This aligns with an InvestingPro Tip highlighting Target's low P/E ratio in comparison to its earnings growth potential.
Another InvestingPro Tip emphasizes Target's status as a prominent player in the Consumer Staples Distribution & Retail industry, which may reassure investors of its market stability and brand strength. Moreover, the company's consistent dividend growth, with dividends raised for 54 consecutive years, signals a strong commitment to shareholder returns.
InvestingPro data also reveals a PEG ratio of 0.31 for the last twelve months as of Q1 2025, suggesting potential for growth at a value. The revenue for the same period was recorded at $106.62 billion, despite a slight decrease in revenue growth. While the short-term obligations exceeding liquid assets could be a point of concern, the moderate level of debt and the prediction of profitability for this year could balance investor sentiment.
For potential investors and current shareholders seeking a deeper dive into Target's financials and future prospects, there are additional InvestingPro Tips available at https://www.investing.com/pro/TGT, which could provide further guidance in making informed investment decisions.
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