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

Zacks Equity Research

Target (TGT) closed at $108.78 in the latest trading session, marking a +0.89% move from the prior day. This move outpaced the S&P 500's daily gain of 0.37%. Meanwhile, the Dow gained 0.42%, and the Nasdaq, a tech-heavy index, added 0.56%.

Prior to today's trading, shares of the retailer had gained 0.27% over the past month. This has lagged the Retail-Wholesale sector's gain of 2.79% and the S&P 500's gain of 4.42% in that time.

Investors will be hoping for strength from TGT as it approaches its next earnings release, which is expected to be November 20, 2019. The company is expected to report EPS of $1.17, up 7.34% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $18.47 billion, up 3.62% from the prior-year quarter.

TGT's full-year Zacks Consensus Estimates are calling for earnings of $6.15 per share and revenue of $78.33 billion. These results would represent year-over-year changes of +14.1% and +3.95%, respectively.

It is also important to note the 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 has moved 0.07% higher. TGT is currently a Zacks Rank #3 (Hold).

Investors should also note TGT's current valuation metrics, including its Forward P/E ratio of 17.52. This represents a discount compared to its industry's average Forward P/E of 23.21.

Also, we should mention that TGT has a PEG ratio of 2.48. 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. 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 30, putting it in the top 12% 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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