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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 $110.45, moving +0.27% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.2%. Meanwhile, the Dow gained 0.04%, and the Nasdaq, a tech-heavy index, lost 0.13%.

Coming into today, shares of the retailer had lost 0.38% in the past month. In that same time, the Retail-Wholesale sector gained 6.5%, while the S&P 500 gained 7.08%.

Investors will be hoping for strength from TGT as it approaches its next earnings release, which is expected to be November 20, 2019. In that report, analysts expect TGT to post earnings of $1.17 per share. This would mark year-over-year growth of 7.34%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $18.47 billion, up 3.62% from the year-ago period.

TGT's full-year Zacks Consensus Estimates are calling for earnings of $6.16 per share and revenue of $78.33 billion. These results would represent year-over-year changes of +14.29% and +3.95%, respectively.

It is also important to note the recent changes to analyst estimates for TGT. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.05% higher. TGT is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, TGT is holding a Forward P/E ratio of 17.87. This valuation marks a discount compared to its industry's average Forward P/E of 23.29.

Meanwhile, TGT's PEG ratio is currently 2.53. 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. Retail - Discount Stores stocks are, on average, holding a PEG ratio of 2.36 based on yesterday's closing prices.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 51, putting it in the top 20% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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