Target Corporation (TGT), headquartered in Minneapolis, Minnesota, offers an array of owned and premium branded goods ranging from household essentials and electronics to toys and apparel for men, women, and kids. It also provides food and pet supplies, jewelry, accessories, shoes, beauty and personal care, cleaning, paper products, automotive products, and home furnishings. Valued at $67.07 billion by market cap, the company serves customers through its nearly 2,000 stores and digital channels, including Target.com.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and TGT fits right into that category, signifying its substantial size, stability, and dominance in its industry.
The leading general merchandise retailer has fallen 21.6% from its 52-week high of $181.86, which it hit on Apr. 1. Shares of TGT are down 15% over the past three months, underperforming the Consumer Staples ETF Vanguard’s (VDC) 1.8% gains over the same time frame.
Longer term, TGT shares rose 6.5% over the past year, and in 2024, the stock is up marginally. By contrast, the VDC is up 7.9% on a YTD basis and 5.3% over the past 52 weeks.
The stock has been trading below its 50-day moving average since late April but above its 200-day moving average since mid-December 2023.
On May 22, TGT shares closed down more than 8% after the company reported its Q1 results. Its adjusted EPS was $2.03, below the consensus estimate of $2.05. The company’s revenue was $24.53 billion, surpassing Wall Street estimates of $24.52 billion. For the current quarter ending in July, TGT expects EPS between $1.95 and $2.35, the midpoint coming below the consensus of $2.19. Also, it expects its full-year EPS to come between $8.60 and $9.60.
TGT’s overall performance can be attributed to its challenges from elevated inflation, which has affected consumer spending. The company’s comparable sales fell 3.7% in the previous quarter, marking the fourth consecutive quarter of declining comparable sales.
Rival Walmart Inc. (WMT) has outperformed TGT with 30.4% gains in the past 52 weeks and a 28.6% increase on a YTD basis.
Despite its recent underperformance compared to other consumer staples stocks, analysts are optimistic about TGT’s prospects. The stock has a consensus rating of “Moderate Buy” from the 31 analysts covering it, and the mean price target of $175.21 is a 22.9% premium to current levels.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
