68.23 +0.02 (0.03%)
After hours: 6:29PM EST
|Bid||68.23 x 800|
|Ask||68.49 x 900|
|Day's Range||67.80 - 68.76|
|52 Week Range||60.15 - 90.39|
|Beta (3Y Monthly)||0.85|
|PE Ratio (TTM)||11.32|
|Earnings Date||Mar 4, 2019 - Mar 8, 2019|
|Forward Dividend & Yield||2.56 (3.75%)|
|1y Target Est||80.13|
American Eagle (AEO) witnesses strong holiday season driven by its solid merchandising and other initiatives. It posts comps growth of 6% for fourth-quarter fiscal 2018 to date.
Let's look at two retail stocks that might look good in your portfolio right now. On Monday, the athletic apparel retailer raised its guidance for fourth-quarter earnings and revenue, igniting a 5.73% gain. In a statement, Lululemon cited "the ongoing success of our product offerings," and referenced the strong connection between the business and its loyal customers.
# Target Corp ### NYSE:TGT View full report here! ## Summary * Perception of the company's creditworthiness is negative * Bearish sentiment is low * Economic output in this company's sector is expanding ## Bearish sentiment Short interest | Positive Short interest is low for TGT with fewer than 5% of shares on loan. The last change in the short interest score occurred more than 1 month ago and implies that there has been little change in sentiment among investors who seek to profit from falling equity prices. ## Money flow ETF/Index ownership | Neutral ETF activity is neutral. The net inflows of $13.30 billion over the last one-month into ETFs that hold TGT are not among the highest of the last year and have been slowing. ## Economic sentiment PMI by IHS Markit | Positive According to the latest IHS Markit Purchasing Managers' Index (PMI) data, output in the Consumer Services sector is rising. The rate of growth is strong relative to the trend shown over the past year, and is accelerating. ## Credit worthiness Credit default swap | Negative The current level displays a negative indicator. TGT credit default swap spreads are near their highest levels for the past 1 year, which indicates the market's more negative perception of the company's credit worthiness. Please send all inquiries related to the report to firstname.lastname@example.org. Charts and report PDFs will only be available for 30 days after publishing. This document has been produced for information purposes only and is not to be relied upon or as construed as investment advice. To the fullest extent permitted by law, IHS Markit disclaims any responsibility or liability, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way. Please view the full legal disclaimer and methodology information on pages 2-3 of the full report.
Shares of Lululemon (LULU) soared as high as 8% in morning trading Monday after the yoga apparel powerhouse raised its Q4 earnings and revenue guidance.
Target Shone during the Holidays—Why Didn't Its Stock? (Continued from Prior Part) ## Ratings and target price The majority of Wall Street analysts maintain neutral outlooks on Target (TGT) stock. Analysts expect Target to benefit from increased consumer spending. Its comps are likely to sustain momentum in the coming quarters driven by growth in its traffic. Target’s investments in price, expanded digital offerings, store remodelings, the opening of small-format stores, and exclusive brand launches are expected to support its top line growth. However, pressure on its margins is expected to hurt its stock. Among the 26 analysts providing ratings on Target stock, 16 have given it “holds,” nine have given it “buys,” and one has given it a “sell.” Analysts have a consensus target price of $82.12 per share on TGT stock, which implies a potential upside of 20.3% based on its closing price of $68.29 on January 10. ## What Wall Street recommends for TGT’s peers The majority of analysts have favorable outlooks on Costco (COST) stock. Costco continues to generate strong sales and earnings growth and outperform its peers. Among the 28 analysts following COST, 17 have given it “buy” ratings, and 11 have given it “holds.” Analysts maintain a consensus target price of $237.70 on the stock, which indicates a potential upside of 12.8%. Meanwhile, of the analysts covering Walmart (WMT) stock, 18 have given it “holds,” and 14 have given it “buys.” Analysts have a consensus target price of $106.81 on WMT, which indicates a potential upside of 12.5% based on its closing price of $94.96 on January 10. Browse this series on Market Realist: * Part 1 - Target Shone during the Holidays—Why Didn’t Its Stock? * Part 2 - What’s in the Offing for Target Stock? * Part 3 - Why Target’s Digital Sales Could Grow at a Healthy Rate
Shares of struggling merchandise retailer Bed Bath & Beyond (NASDAQ:BBBY) surged as much as 20% after the company reported third-quarter numbers that included a bullish forecast from management. Specifically, management said that due to the early success of a few profit-optimizing initiatives, fiscal 2019 earnings are expected to be flat with fiscal 2018 earnings, and fiscal 2020 earnings are expected to be up from both. The Street had been sitting at earnings-per-share of $2 for fiscal 2018, $1.60 for fiscal 2019 and $1.40 for fiscal 2020. Thus, the guide for $2-plus EPS in fiscal 2019 and 2020 was a huge 20%-plus lift. Consequently, BBBY stock rallied 20%. But, don't let this rally fool you. Bed Bath & Beyond still missed on revenues and comparable sales in the quarter. The comparable sales miss was wide, and comps are still negative. Gross margins are still falling. So are operating margins. Profits are down, too. InvestorPlace - Stock Market News, Stock Advice & Trading Tips In other words, nothing about the current numbers warranted a 20% rally in BBBY stock. Instead, the rally was powered entirely by what management said is going to happen. Granted, management knows their business better than anyone, so the guide shouldn't be disregarded. But, it also seems ambitious given current trends. In the big picture, a lot needs to go right in order for earnings to grow over the next several years. If that does happen, BBBY stock could essentially double. But, it probably won't happen, and as such, the stock is best avoided until there's confirmation in the numbers that presently negative trends are reversing course. ### BBBY Stock: The Quarter Was Still Awful By most retail standards, Bed Bath & Beyond's third quarter was pretty bad. * 10 A-Rated Stocks the Smart Money Is Piling Into Comparable sales dropped 1.8%. The consensus was for a 0.3% drop, so that's a wide miss. It's also a 2018 low, as comps in the first two quarters of the year dropped 0.6%. Plus, it's lower than the comp drop in 2017 (down 1.3%) and 2016 (down 0.6%). In other words, comparable sales trends are still negative, and arguably only getting worse. Meanwhile, gross margins are still falling. In the quarter, gross margins fell back by 210 basis points year-over-year. Granted, that's better than the second quarter's 270 basis point compression. But, it's also worse than the first quarter's 140 basis point compression. Also, margins have come down a lot from their peak, and the fact that they are still falling by several hundred basis points year-over-year is a bearish trend. Overall, this is still a declining comp, eroding margin company with trends that aren't getting better yet. Those trends could get better. But, a lot has to go right in order for that to happen. ### A Lot Has to Go Right Bed Bath & Beyond's struggles aren't anything new. For several years, this has been a retailer with negative comparable sales growth, eroding margins, and falling relevancy in an increasingly competitive retail world. Management implied that this era is coming to an end. Specifically, due to a few profit-optimizing initiatives, management expects margins to finally stabilize and potentially even improve over the next several years. That's a tall order. Gross margins have been in perpetual decline for most of this decade due to elevated competition. That competition is only getting bigger, stronger and fiercer than ever before, with Amazon (NASDAQ:AMZN), Walmart (NYSE:WMT) and Target (NYSE:TGT) all aggressively turning into low-cost, one-stop-shop retail destinations with unparalleled convenience. In that environment, it's tough to see BBBY's gross margins heading higher. Management could cut lower margin SKUs and/or not engage in price wars with the Big Three. It seems that's what they are planning to do. That will preserve gross margin. It will also accelerate the comparable sales erosion. If comps keep falling, or start falling by more, there's no way the company can leverage operating expenses and pull down the SG&A rate. Big picture, it's tough to see BBBY stock benefiting from a trio of positive comps, rising gross margins and falling opex rates over the next several years. If you get all three, the company could reasonably do about $3 in EPS in five years. A historically average 10X forward multiple on that implies a $30 long-term price target. But, because of the aforementioned competitive risks, you likely won't get all three. Instead, you will gross margin expansion at the expense of sales growth, and that will lead to -- at best -- stable earnings. If BBBY stock is supported by stabilized $2 EPS in five years, then an average 10X forward multiple on that implies a four-year forward price target of $20. Discounted back by 10% per year, that equates to a present value for BBBY stock of between $13 and $14. * 7 Pharmaceutical Stocks That Just Raised Prices This Year That's exactly where BBBY stock trades today, so realistic growth assumptions imply shares are fairly valued here. ### Bottom Line on BBBY Stock The quarter wasn't good, the guide is promising and there's finally a light at the end of this dark tunnel for Bed Bath & Beyond stock. But, that doesn't mean it's time to buy into the stock. Instead, Bed Bath & Beyond stock seems fully valued after its post-earnings pop, and further upside will have to be confirmed by an improvement in the numbers, which hasn't happened just yet. As of this writing, Luke Lango was long AMZN and TGT. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Key Emerging-Market Stocks to Buy for Contrarian Investors * 7 Stocks at Risk of the Global Smartphone Slowdown * 7 Pharmaceutical Stocks That Just Raised Prices This Year Compare Brokers The post Don't Let the Rally In Bed Bath & Beyond Stock Fool You appeared first on InvestorPlace.
Target Shone during the Holidays—Why Didn't Its Stock? (Continued from Prior Part) ## Stellar performance so far in fiscal 2018 Target Corporation’s (TGT) digital sales have accelerated sequentially in the past couple of quarters and have grown at a rapid rate. Target’s comparable digital sales rose 28%, 41%, and 49%, respectively, in the first, second, and third quarters of 2018. Meanwhile, its digital sales rose 29% during the holiday season. Moreover, its Order Pickup and Drive Up services surged 60% during the holidays and accounted for ~25% of its digital sales. In comparison, Walmart’s (WMT) digital sales also increased sequentially in the first three quarters of fiscal 2019. Walmart’s digital sales jumped 43% during its last-reported quarter as the world’s largest retailer expanded its online grocery pickup services and offered fast doorstep delivery. ## Outlook Target’s e-commerce sales are expected to sustain momentum in the coming quarters driven by the expansion of its fast-delivery options to newer markets and growth in the membership base for Shipt. At the end of the third quarter, Target had expanded its same-day delivery through Shipt to 1,400 stores across 25 markets. To match Walmart’s and Amazon’s (AMZN) curbside pickup services, Target has grown its drive-up service to ~1,000 stores. Its ship-from-store and Restock services are likely to support its e-commerce sales growth rate. Besides its convenient fulfillment options, Target’s value pricing and focus on merchandising are expected to drive its top line growth. Continue to Next Part Browse this series on Market Realist: * Part 1 - Target Shone during the Holidays—Why Didn’t Its Stock? * Part 2 - What’s in the Offing for Target Stock? * Part 4 - What’s the Expected Upside in Target Stock?
Retail stocks are off to a hot start to 2019 despite mixed holiday sales numbers. Several Wall Street analysts weighed in on retail sales numbers from top stocks. Here’s a sampling of what they said. ...
Target Corp. is poised to “be one of the top performers for holiday 2018,” Charlie O’Shea, Moody’s lead retail analyst, said after the retailer reported same-store sales growth of 5.7% for the November and December period.
Target Shone during the Holidays—Why Didn't Its Stock? (Continued from Prior Part) ## TGT is likely to sustain its momentum in 2019 Target Corporation (TGT) reported strong financials in the first three quarters of 2018, and we expect it to end 2018 on a strong note and post stellar comps and EPS growth. Target is also expected to sustain the growth momentum in its sales and earnings in 2019 led by the expansion of its digital offerings. However, its growth rate is expected to slow as it faces tough YoY (year-over-year) comps. Target’s top line is expected to increase led by growth in its comps. The company’s expansion of its fulfillment options, including delivery through Shipt, Drive Up, and Order Pickup, is expected to drive its traffic. Meanwhile, store remodelings and the opening of new stores are likely to support its comps growth, as these stores generate higher sales and productivity. Target’s focus on merchandising and exclusive product launches should also drive its sales. Target managed to stabilize its bottom line in the first three quarters of 2018. A considerable fall in its effective tax rate, lower interest expenses, and share repurchases supported Target’s bottom line. We expect Target’s bottom line to continue to increase in 2019 driven by improved comps and an anticipated fall in its per-unit digital fulfillment costs. Wall Street expects Target’s top line to increase 3.1% in 2019. Meanwhile, its bottom line is expected to increase 4%. ## Stock performance in 2019 Retail stocks had wiped out most of their gains as of the end of 2018. However, these retailers started 2019 on a positive note. Target stock is up 3.3% so far this year. Meanwhile, Costco (COST), Kroger (KR), and Walmart (WMT) stocks have risen 3.4%, 3.6%, and 1.9%, respectively. Continue to Next Part Browse this series on Market Realist: * Part 1 - Target Shone during the Holidays—Why Didn’t Its Stock? * Part 3 - Why Target’s Digital Sales Could Grow at a Healthy Rate * Part 4 - What’s the Expected Upside in Target Stock?
Shares of Target Corporation (TGT) fell 2.9% on January 10 despite the company’s strong holiday sales numbers. Target has disappointed on the margin front over the past several quarters, primarily reflecting higher digital fulfillment costs and price investments. During the holiday season, Target’s comparable sales rose 5.7% driven primarily by the continued strength in its e-commerce platform.
Preliminary 2018 holiday retail sales reports were pretty good. Widely followed reports from Mastercard and Adobe both pegged the 2018 holiday season as being a record one, powered by healthy labor conditions, rising wages, strong credit and continuing red-hot growth in the digital segment. As a result, retail stocks rebounded in a big way at the end of December and into January. During that two week stretch, the SPDR S&P Retail ETF (NYSEARCA:XRT) rallied 15%. * 7 Stocks to Buy That Are Ready for Takeoff As it turns out, though, the 2018 holiday season wasn't a big success for everyone in retail. Case in point: Macy's (NYSE:M). The department store stalwart reported holiday numbers in early January that came in well below expectations, forcing the retailer to cut its full-year revenue and profit guides. In response, Macy's stock dropped 20% to below $30. It's hard to argue against the drop. Macy's holiday numbers weren't good, and it is becoming increasingly clear that this is not the same company it was even a few years ago. Other retailers are adapting better to today's dynamic retail environment. Meanwhile, M finds itself somewhat in the gray area of decent prices and decent quality, but doesn't dominate in either category. That lack of dominance equates to a lack of moat -- and that is why consumers are so easily forgetting about Macy's. InvestorPlace - Stock Market News, Stock Advice & Trading Tips As such, the qualitative narrative here is troubled. But that doesn't mean Macy's stock is doomed. Instead, despite the troubled qualitative narrative, this is still a department store giant that has staying power due to its scale, convenience and affordable prices. That long-term staying power implies stable revenue and earnings power over the next several years. Such stability isn't priced into Macy's stock (now below $30), meaning this dip offers an interesting opportunity for contrarian investors. ### Macy's Holiday Numbers Don't Spark Much Confidence The plain and simple here is that Macy's holiday numbers weren't good. While peer Target (NYSE:TGT) -- which has been actively developing multiple omni-channel sales strategies -- reported a 5.7% comparable sales increase during the holiday period, Macy's holiday comp increase was just 1.1%. That's bad, and it speaks to just how slow Macy's has been in adapting to today's retail environment. Moreover, the 1.1% rise marks a significant slowdown from the typical 3%-and-up adjusted comps Macy's has reported all year long. Thus, the sales trajectory is worsening, not improving. Also, margins must've been hit in the quarter, because management not only revised its full year comparable sales growth guide down, but also pushed its margin and profit guides lower, too. As of three months ago, this was a positive-revenue-growth company with expanding gross margins and a stable opex rate. Now, revenue growth is expected to be flat this year, gross margins are expected to be down, and the opex rate is expected to rise. None of that is good news. However, there was one positive takeaway from the holiday report. On a two-year stack basis, comparable sales growth during the holiday period was actually as good as it's been all year. Through the first three quarters of 2018, comparable sales growth was running around 3% and up. But, the laps were in the -2% to -5% range, so the two year stack comp was never greater than 0.4%. Holiday 2018 comparable sales rose 1.1%, on top of a 1.1% gain last year. Thus, on a two-year stack basis, comparable sales rose over 2%. That's markedly better than the year-to-date trend and provides some relief and hope for bulls. ### Macy's Stock Is Reasonably Undervalued The decline in comparable sales growth as the lap got tougher in 2018 implies that this isn't a growth company. But improvement in the two-year stack comp does imply that the company has long-term staying power, since it implies sales on a two-year basis are actually fairly stable. This lines up with common sense. Macy's is a big retailer. Sure, the company is old and hasn't adjusted all that well to the digital era, but it has a huge presence, wide reach, competitive prices and offers all-in-one convenience. As a result, while these stores aren't doing more business than ever, they also aren't going away any time soon. In terms of modeling, that implies tepid sales growth over the next several years alongside flattish margins. That combination strongly implies that Macy's long-term earnings power should stabilize somewhere around $4 per share. The market won't pay a big multiple for that. Historically, Macy's stock trades around 11 times forward earnings. Let's say $4 per share is sustainable in five years. That implies a $44 price target in four years. Discounted back by 10% per year, that implies a price target today of $30. Thus, under $30, Macy's stock looks reasonably undervalued -- even under the assumption that revenues and earnings are simply stable over the next several years. * 7 Stocks at Risk of the Global Smartphone Slowdown ### Bottom Line on M Stock Macy's holiday report was ugly, and not the sort of report that gets bulls excited. But, below $30, all you need for Macy's stock to work is stability in the company's operations and profits over the next several years. That seems doable, making this dip look like a contrarian buying opportunity. As of this writing, Luke Lango was long M and TGT. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks You Can Set and Forget (Even In This Market) * 10 Virtual Assistants for the Future of Smart Homes * 7 5G Stocks to Buy as the Race for Spectrum Tightens Compare Brokers The post Buy the Big Dip Below $30 in Macyas Stock appeared first on InvestorPlace.
Target Corp. is introducing its newest exclusive brand, Kona Sol, an in-house brand of swimsuits available both in store and online.
reported weaker-than-expected sales in December, the WSJ’s Sarah Nassauer writes, capping a holiday sales season that showed retailers moving in two very different directions. Amazon.com Inc. gobbled up market share as more shoppers turned away from traditional department stores and malls. Inc. reported strong sales, a result of work to attract more shoppers online and investments in store operations like e-commerce pickup and delivery.
Technically speaking, it could be important if the S&P 500 (SPX) can hold above the key 2584 level. Investors cheered fresh comments from Federal Reserve Chairman Jerome Powell, who reiterated that the central bank will be patient with monetary policy.
Target's (TGT) holiday comps not only increased year over year, but the rate of growth also showed an improvement from the year-ago period.
shares declined in after-hours trading on Thursday after the retailer reported record holiday sales that were mostly in line with expectations. The global consumer retailer that operates brands like Anthropologie and Free People said total company net sales and same-store sales for November and December both increased 5%. Comparable sales were driven by double-digit growth in the company's digital channel, which offset negative retail store sales.
Christmas was supposed to sparkle for Macy’s. Along with other big names in US retail, the department store chain’s chairman and chief executive Jeff Gennette had predicted a bumper festive shopping season. “It’s a very good backdrop for us,” he said the week before Black Friday, describing consumer confidence as “very strong” as he raised sales and earnings forecasts.
It wasn't a screaming victory, but Thursday's 0.45% gain for the S&P 500 marks its fifth gain in a row. Observers are gaining confidence, though shrinking volume says actual participants are thinning out. Bed Bath & Beyond (NASDAQ:BBBY) led the way with its 16.6% romp in response to an unexpectedly strong 2019 outlook. Twitter (NYSE:TWTR) made some bullish waves as well, however, up a healthy 2.6% after Bank of America's Merrill Lynch upgraded TWTR stock from "underperform" to "buy," citing an opportunity to improve user engagement. There weren't a whole lot more advancers than decliners though, with Target Corporation (NYSE:TGT) doing the most collective damage. Shares of the big-box store were off 2.9% in sympathy with a couple of alarming reports from rival retailers. InvestorPlace - Stock Market News, Stock Advice & Trading Tips While the marketwide rally is anything but sweeping, that's beneficial in the sense that winners are separated from losers and actual trends can develop without the market's interference. To that end, stock charts of General Electric (NYSE:GE), Hologic (NASDAQ:HOLX) and MGM Resorts International (NYSE:MGM) are among the best of those bets heading into the weekend. ### Hologic (HOLX) More than once in recent months Hologic has merited a closer look. The converging trading range has been building up some pent-up action. It just needed the right catalyst to put that move into motion … higher or lower. * Morgan Stanley: 7 Risky Stocks to Sell Now It looked like that was going to happen in November, in a bullish direction, but the broad market tide had other plans for HOLX. Thursday's break back above the long-term technical ceiling, however, may be the one that sticks now that the market is helping. Click to Enlarge • The converging trading range in question is plotted by white dashed lines on both stock charts. Hologic is back above the upper edge of that range as of yesterday's close. • Still, given the fake-out seen a few weeks ago, the smart-money move here may be waiting to see if HOLX can push back above the technical ceiling around $45, plotted with a yellow dashed line. • While the undertow has actually been bullish for several weeks, any move between here and $45 is unlikely to be a straight line. It still may be worth the wait, however. ### General Electric (GE) Though well up from its late-December low, the gain General Electric shares have dished out since then has been in question. The doubters were feeling particularly vindicated on Tuesday and Wednesday, when the advance stopped and reversed. Looking back on Wednesday's and Thursday's bars, however, the bullish case for GE may be even better now specifically because of the stumble. Click to Enlarge • Wednesday's bar, marked with a yellow arrow, only had to kiss the recently hurdled 50-day moving average line, plotted in purple, to renew the buying effort. Thursday's follow-through confirms Wednesday's doji was indeed a pivot. • The previous line in the sand is still in play, however. That's the $9 area, where General Electric has found a ceiling more than once in recent weeks. • Looking back, the November meltdown looks like it could have been a capitulation of sorts. We've seen more buying volume for GE now than we have in months. ### MGM Resorts International (MGM) Finally, three weeks ago, MGM Resorts International looked like it was in massive trouble. As of two weeks ago, that idea was in question. One week ago, MGM looked ready to take flight. As of this morning, nobody has a clue. Thursday's action raised far more questions than answers. The good news is, the bulls and the bears are going to have to make a decision soon. The lines in the sand are pretty clear too. Click to Enlarge • The shape of yesterday's bar is telling. The bulls were content to pile on early on, but by the end of the day most of the bulls were getting back out again. This looks like the pivot out of the uptrend. • Or, maybe it isn't. The buying volume this week has not only been above average, it has been growing too. On the weekly chart we've got a fresh MACD buy signal and a Chaikin line back above zero. • A pause here isn't surprising, as the white 200-day moving average line comes into view. From here, the bulls will have to either take MGM to the next level or throw in the towel. If the 200-day line can be hurdled, that should be a bullish catalyst. As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks You Can Set and Forget (Even In This Market) * 10 Virtual Assistants for the Future of Smart Homes * 7 5G Stocks to Buy as the Race for Spectrum Tightens Compare Brokers The post 3 Big Stock Charts for Friday: General Electric, Hologic and MGM Resorts appeared first on InvestorPlace.
Retail giant Target (NYSE:TGT) didn't disappoint investors in its highly anticipated holiday numbers report on Thursday. With results that largely surpassed expectations, TGT stock initially popped. Then, retailing peers Kohl's (NYSE:KSS) and Macy's (NYSE:M) reported much-softer holiday numbers, implying that not all was well this holiday season. Recession and consumer spending fears were reignited. Everyone forgot about Target's blowout numbers as the whole retail sector dropped, even TGT stock. Make no mistake. This post-holiday sales dip in Target stock is a buying opportunity. InvestorPlace - Stock Market News, Stock Advice & Trading Tips ### Still a Hot Retail Story Target's holiday sales report was excellent across the board. Strong comparable sales increases. Strong traffic growth. Price increases. Continued huge digital sales increases. Promising signs that new omni-channel initiatives are improving the sales trajectory. Management maintained its guidance. Overall, the holiday report was very good, and underscored that Target remains the hottest story in retail. * Morgan Stanley: 7 Risky Stocks to Sell Now Meanwhile, TGT stock is still undervalued relative to its long-term growth potential. But, it had rallied more than 15% in the two weeks leading into the holiday sales update. So, a near-term pullback is warranted, and nothing more than an opportunity to buy an undervalued stock on a healthy selloff. ### Target's Seeing Growth in all the Right Areas Comp sales increased 5.7% in the November-December period. That's a really strong number. Coming into the holiday period, Target reported 5%-plus comparable sales growth in the third quarter, and that was a near-decade high. Kohl's holiday comp of 1.2% and Macy's 1.1% number paled by comparison. Also, Target's 5.7% 2018 holiday comp is better than the 3.4% 2017 holiday comp that investors remember as the catalyst number that kick-started a huge rally in TGT stock from $60 to $90. Overall, this year's holiday comp sales increase is simply outstanding. Importantly, growth came from all the right areas. Most of the increase came from higher traffic, so Target isn't relying on price hikes to drive sales growth. The digital channel saw sales increase nearly 30%, marking yet another quarter of 25%-plus digital sales growth. Indeed, the company is now on track to report five consecutive years of 25%-plus digital sales growth. Within that red-hot digital channel, growth is being driven by the company's new omni-channel initiatives like Store Pickup and Drive Up. Those efforts were up more than 60% year-over-year, and accounted for 25% of the company's total digital sales during holiday 2018. All together, Target's holiday report checked all the right boxes. Big comps? Check. Traffic increases? Check. Strong digital sales? Check. New initiatives gaining momentum? Check. From head to toe, it was all checks, and that means that Target remains the hottest story in retail today. ### TGT Stock Is Undervalued Target stock won't remain red-hot forever. But, the bull thesis is that the company is building a sustainable omni-channel foundation to grow sales and earnings at a healthy rate over the next several years. At the moment, this omni-channel driven growth potential is undervalued by the market. * The 7 Best Stocks in the Entrepreneur Index Long term, this is a stable 2% revenue growth company with stable gross margins and room for opex leverage through stable sales growth and cost-cutting automation initiatives. If you put that all together, Target has a realistic opportunity to hit $7 in EPS by fiscal 2023. A historically average 16x forward multiple on that implies a fiscal 2022 price target of $112. Discounted back by 10% per year, that equates to a fiscal 2018 price target north of $75. Target stock trades under $70 today. Thus, TGT shares are reasonably undervalued. Moreover, this reasonably undervalued stock has rallied in a big way over the last two weeks, gaining more than 15% in anticipation of strong holiday numbers. After such a huge rally, the stock needed cool down. Now, it's cooling down and doing so against the backdrop of strong fundamentals and an attractive valuation. Put all that together, and you have a compelling "buy the dip" situation in Target stock. ### Bottom Line on TGT Stock Target is the hottest company in retail right now, and is coming off a record holiday season that underscores just how well this company is doing at the present moment. TGT stock is selling off because of bad reports from Kohl's and Macy's. But, that's just noise. Eventually, that noise will be muted, and Target stock will resume its rally. When it does, upside to $75-plus levels looks likely. As of this writing, Luke Lango was long TGT and M. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks You Can Set and Forget (Even In This Market) * 10 Virtual Assistants for the Future of Smart Homes * 7 5G Stocks to Buy as the Race for Spectrum Tightens Compare Brokers The post Buy The Post-Holiday Sales Dip In Target Stock, Retail's Hottest Story appeared first on InvestorPlace.
Target Corp. is launching its search for a new finance chief at a crucial time: After a strong holiday season, the Minneapolis-based retailer needs to keep the momentum going while experimenting with new ways to reach its customers to compete with e-commerce rivals. The store operator announced Thursday that Chief Financial Officer Cathy Smith plans to step down once a successor has been named and move on to an advisory role until May 2020. Ms. Smith, who became Target’s CFO in 2015 after stints at Express Scripts Holding Co., Walmart Inc. and GameStop Corp., said she intends to spend more time with her family.
It was supposed to be a great holiday shopping season. Many investors had expected department stores to enjoy robust sales in light of a U.S. economy buoyed by low unemployment, higher wages, strong consumer confidence and cheap gas. Macy's saw only a slight increase of 1.1 percent in sales during November-December at stores opened at least year.