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Target (TGT) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Target (TGT) closed the most recent trading day at $82.56, moving +0.82% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.25%. Elsewhere, the Dow gained 0.39%, while the tech-heavy Nasdaq lost 0.09%.

Heading into today, shares of the retailer had lost 6.79% over the past month, outpacing the Retail-Wholesale sector's loss of 6.94% and lagging the S&P 500's loss of 5.58% 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%. Our most recent consensus estimate is calling for quarterly revenue of $18.33 billion, up 3.12% from the year-ago period.

TGT's full-year Zacks Consensus Estimates are calling for earnings of $5.92 per share and revenue of $78.10 billion. These results would represent year-over-year changes of +9.83% and +3.64%, respectively.

Investors should also note any 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. The Zacks Consensus EPS estimate remained stagnant within the past month. TGT is currently a Zacks Rank #2 (Buy).

Looking at its valuation, TGT is holding a Forward P/E ratio of 13.83. For comparison, its industry has an average Forward P/E of 20.69, which means TGT is trading at a discount to the group.

Investors should also note that TGT has a PEG ratio of 1.95 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. Retail - Discount Stores stocks are, on average, holding a PEG ratio of 1.85 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 56, putting it in the top 22% 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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