Consumer Discretionary

By Dean Seal Shares of Target jumped after the retailer’s fourth-quarter earnings handily topped analyst forecasts and its guidance came in above estimates as well. The stock was up 8.5% at $163.30 in premarket trading. Shares had already gained 5.7% year-to-date when the market closed on Monday. Target said Tuesday morning that fourth-quarter revenue was up 1.7% at $31.92 billion thanks to an extra selling week. Excluding that week, comparable sales fell 4.4%. Analysts polled by FactSet had been expecting just $31.83 billion and comparable sales to decline 4.5%. Earnings of $2.98 a share, up from $1.89 a share in the year-ago quarter, topped analyst projections for $2.42 a share, according to FactSet. The Minneapolis-based company is guiding earnings of $1.70 to $2.10 a share on a 3% to 5% decline in comparable sales in the first quarter. Analysts surveyed by FactSet are expecting $2.08 a share on a 3.6% […]

Target’s 4Q comparable sales were down 4.4% due largely to a 5.4% decline in sales at its brick-and-mortar stores. Comparable digital sales were down less than 1%. CEO Brian Cornell says customers are adapting to changes in the in-store and digital shopping experience. Same-day services, which include in-store pickup, drive-up pickup and Shipt same-day delivery, now make up more than 10% of its total revenue and were up 13.6% during 4Q, led by the drive-up sales. Shares rise 7.5% to $161.75 premarket.

Target’s comparable sales declined as expected in 4Q as sticky inflation and other macro pressures continued to pinch discretionary spending, but the retail giant pumped up margins during the quarter and delivered higher earnings than expected. Gross margin was 25.6%, up from 22.7% in the year-ago quarter, due to lower markdowns, freight costs, supply chain costs and digital fulfillment costs, along with favorable shifts in category mix. Shrink costs were also lower than they were a year ago, with higher store loss rates being offset by the timing of inventory accruals. Per-share earnings of $2.98 cleared analyst forecasts for $2.42 according to FactSet.

Target (NYSE:TGT) Stock Analyst Ratings Date Upside/Downside Analyst Firm Price Target Change Rating Change Previous / Current Rating 03/05/2024 -1.78% Telsey Advisory Group → $160 Reiterates Outperform → Outperform 03/01/2024 -3.62% JP Morgan $125 → $157 Maintains Neutral 02/29/2024 -1.78% Telsey Advisory Group → $160 Reiterates Outperform → Outperform 02/26/2024 4.36% Oppenheimer $160 → $170 Maintains Outperform 02/21/2024 1.29% Wells Fargo $155 → $165 Maintains Overweight 02/16/2024 -6.08% Stifel $141 → $153 Maintains Hold 02/07/2024 4.36% Gordon Haskett → $170 Upgrades Hold → Buy 02/01/2024 — Goldman Sachs Maintains Buy 01/16/2024 1.29% Morgan Stanley $140 → $165 Upgrades Equal-Weight → Overweight 01/04/2024 -4.85% Wells Fargo $148 → $155 Maintains Overweight 11/16/2023 -14.06% Roth MKM → $140 Reiterates Neutral → Neutral 11/16/2023 -12.83% Citigroup $117 → $142 Maintains Neutral 11/16/2023 -13.44% Stifel $130 → $141 Maintains Hold 11/16/2023 -20.2% BMO Capital $120 → $130 Maintains Market Perform 11/16/2023 -3.62% RBC Capital

Target (TGT) on Tuesday recorded a 58% jump in fiscal fourth-quarter earnings that topped market estimates, as the retailer benefited from lower markdowns and shrink costs. The company’s adjusted earnings came in at $2.98 a share for the three-month period ended Feb. 3, up from $1.89 the year before, surpassing the Capital IQ-polled consensus of $2.41. Sales moved up to $31.47 billion from $30.98 billion, with total revenue rising 1.7% to $31.92 billion. The Street’s view was for $31.85 billion. Comparable sales fell 4.4%, compared with the 4.5% drop modeled by analysts, as the number of transactions decreased by 1.7%, according to the retailer. In the previous three-month period, same-store sales slipped 4.9% while traffic moved down 4.1%. “Our team’s efforts changed the momentum of our business, further improving our sales and traffic trends in the fourth quarter while driving profitability well ahead of expectations,” Chief Executive Brian Cornell said

Target’s (TGT) fiscal fourth-quarter sales likely remained “challenged,” though the retailer’s recent initiatives should help support traffic and share gains going forward, BofA Securities said Friday. The company is scheduled to report fourth-quarter results Tuesday. BofA expects earnings to increase nearly 35% year over year to $2.55 per share, with revenue seen up 1.1% at $31.74 billion. Wall Street is looking for $2.39 and $31.81 billion, respectively, according to the brokerage. BofA expects same-store sales to decline 5%, versus the Street’s call for a 4.6% drop. The firm expects moderating food and beverage inflation and soft discretionary trends to counter improving traffic, backed by Target’s strategic and merchandising measures. “While near-term sales remain challenged, we believe investors may look through recent pressure to a potential inflection, which we believe (Target) may see in (the second quarter),” BofA analyst Robert Ohmes said in a note. The company is expected to face

JP Morgan analyst Christopher Horvers maintains Target with a Neutral and raises the price target from $125 to $157.

Telsey Advisory Group analyst Joseph Feldman reiterates Target (NYSE:TGT) with a Outperform and maintains $160 price target.