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

Zacks Equity Research

Target (TGT) closed the most recent trading day at $87.22, moving -0.9% from the previous trading session. This change lagged the S&P 500's daily gain of 0.28%. At the same time, the Dow added 0.07%, and the tech-heavy Nasdaq gained 0.71%.

Coming into today, shares of the retailer had gained 2.09% in the past month. In that same time, the Retail-Wholesale sector gained 2.94%, while the S&P 500 gained 1.93%.

Wall Street will be looking for positivity from TGT as it approaches its next earnings report date. On that day, TGT is projected to report earnings of $1.61 per share, which would represent year-over-year growth of 9.52%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $18.33 billion, up 3.12% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.92 per share and revenue of $78.11 billion, which would represent changes of +9.83% and +3.65%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for TGT. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. TGT is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, TGT is currently trading at a Forward P/E ratio of 14.86. For comparison, its industry has an average Forward P/E of 21.84, which means TGT is trading at a discount to the group.

It is also worth noting that TGT currently has a PEG ratio of 2.1. 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. The Retail - Discount Stores was holding an average PEG ratio of 2.05 at yesterday's closing price.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 32, which puts it in the top 13% 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.

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


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