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

Zacks Equity Research
Tech Data (TECD) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Target (TGT) closed the most recent trading day at $82.68, moving +0.87% from the previous trading session. This change outpaced the S&P 500's 0.23% loss on the day. Elsewhere, the Dow lost 0.01%, while the tech-heavy Nasdaq lost 0.05%.

Heading into today, shares of the retailer had gained 4.47% over the past month, lagging the Retail-Wholesale sector's gain of 4.53% and outpacing the S&P 500's gain of 3.16% in that time.

Investors will be hoping for strength from TGT as it approaches its next earnings release. On that day, TGT is projected to report earnings of $1.43 per share, which would represent year-over-year growth of 8.33%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.54 billion, up 4.52% from the year-ago period.

TGT's full-year Zacks Consensus Estimates are calling for earnings of $5.79 per share and revenue of $77.91 billion. These results would represent year-over-year changes of +7.42% and +3.4%, respectively.

Investors might also notice recent changes to analyst estimates for TGT. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. TGT is currently a Zacks Rank #2 (Buy).

Valuation is also important, so investors should note that TGT has a Forward P/E ratio of 14.15 right now. Its industry sports an average Forward P/E of 20.9, so we one might conclude that TGT is trading at a discount comparatively.

Also, we should mention that TGT has a PEG ratio of 2.25. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. 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 78, which puts it in the top 31% 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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