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

Zacks Equity Research

Target (TGT) closed at $113.94 in the latest trading session, marking a -0.09% move from the prior day. This change lagged the S&P 500's daily gain of 0.03%. Meanwhile, the Dow lost 0.03%, and the Nasdaq, a tech-heavy index, added 0.14%.

Heading into today, shares of the retailer had lost 11.29% over the past month, lagging the Retail-Wholesale sector's gain of 2.91% and the S&P 500's gain of 3.23% in that time.

TGT will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.66, up 8.5% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $23.67 billion, up 3.01% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.35 per share and revenue of $78.33 billion, which would represent changes of +17.81% and +3.95%, 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.

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 0.5% lower. TGT is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, TGT is currently trading at a Forward P/E ratio of 17.96. Its industry sports an average Forward P/E of 23.68, so we one might conclude that TGT is trading at a discount comparatively.

Meanwhile, TGT's PEG ratio is currently 2.38. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Retail - Discount Stores was holding an average PEG ratio of 2.15 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 88, which puts it in the top 35% 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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