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

Zacks Equity Research

Target (TGT) closed at $112.50 in the latest trading session, marking a +1.59% move from the prior day. This change outpaced the S&P 500's 0.73% gain on the day. Elsewhere, the Dow gained 0.51%, while the tech-heavy Nasdaq added 1.34%.

Heading into today, shares of the retailer had lost 12.16% over the past month, lagging the Retail-Wholesale sector's gain of 0.31% and the S&P 500's of 0% in that time.

TGT will be looking to display strength as it nears its next earnings release. On that day, TGT is projected to report earnings of $1.66 per share, which would represent year-over-year growth of 8.5%. Our most recent consensus estimate is calling for quarterly revenue of $23.59 billion, up 2.65% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.35 per share and revenue of $78.26 billion. These totals would mark changes of +17.81% and +3.86%, respectively, from last year.

Investors should also note any 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 has moved 0.44% lower. TGT is currently a Zacks Rank #3 (Hold).

Digging into valuation, TGT currently has a Forward P/E ratio of 17.43. Its industry sports an average Forward P/E of 22.75, so we one might conclude that TGT is trading at a discount comparatively.

It is also worth noting that TGT currently has a PEG ratio of 2.31. 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. TGT's industry had an average PEG ratio of 2.07 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 46, which puts it in the top 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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