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Target (TGT) Gains As Market Dips: What You Should Know

Zacks Equity Research

Target (TGT) closed the most recent trading day at $87.23, moving +0.2% from the previous trading session. This change outpaced the S&P 500's 0.16% loss on the day. Elsewhere, the Dow gained 0.11%, while the tech-heavy Nasdaq lost 0.44%.

Prior to today's trading, shares of the retailer had gained 1.39% over the past month. This has lagged the Retail-Wholesale sector's gain of 4.42% and the S&P 500's gain of 4% in that time.

Investors will be hoping for strength from TGT as it approaches its next earnings release, which is expected to be August 21, 2019. On that day, TGT is projected to report earnings of $1.61 per share, which would represent year-over-year growth of 9.52%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $18.33 billion, up 3.12% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.92 per share and revenue of $78.11 billion, which would represent changes of +9.83% and +3.65%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for TGT. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. TGT currently has a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that TGT has a Forward P/E ratio of 14.7 right now. This represents a discount compared to its industry's average Forward P/E of 21.33.

Investors should also note that TGT has a PEG ratio of 2.08 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Discount Stores industry currently had an average PEG ratio of 2 as of yesterday's close.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 44, which puts it in the top 18% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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