Target reports record growth, stock skyrockets on earnings
Yahoo Finance's Brian Sozzi and Julie Hyman break down Target's blockbuster fourth-quarter earnings.
Video Transcript
- We're watching earnings this morning in addition to all of the Ukraine and Russia related moves in the market and target beat estimates. Adjusted earnings per share coming in well ahead of what analysts had been predicting. Revenue pretty much in line with estimates. The comparable sales number was weaker than estimated of 8.9% versus the 10.4% that was estimated there.
And Brian says it's interesting that the stock is not reacting negatively to that Comp myth but is rather seemingly investors focusing on the outlook for the year, particularly some reassurance on operating profit and margins.
- Well, is there any scenes that ever going to end? It feels like we've been reporting fourth quarter earnings for three months. It's almost the first quarter time. It's just, it won't stop.
I know, but target, look, I would say the quality of this quarter was a little red flag-ish. I understand the market likes to see the big earnings beat that's stocks tend to trade, companies come out, beat big on earnings stock, price goes up, that's what historically happens here. But kids keep in mind here, target did come out and warned that the first quarter operating margins are going to be, quote, well below what they produced last year.
And I talked to target CFO Michael Fidelki, we'll run that interview a little bit later. But again, I think he did highlight perhaps a little inflationary pressure in the first quarter. Perhaps, a little caution in how consumers are spending giving everything going on in the world. So there is that. But to your point, I think the market is ultimately trading on the earnings beat.
And I'm just looking at the store we have on Yahoo Finance on the home page right now, their longer term outlook. They provide a very upbeat longer term outlook looking for a high single digit percentage, EPS growth rate that was a lot better than the street was looking for. But my calculations, if you're only looking for about 8% earnings growth from target, looking out over the next three years.
- Yeah and it'll be very interesting with this surge in commodities, prices that we have gotten as a result of Russia's invasion of Ukraine and the economic sanctions whether we will see companies start to adjust their forecasts even further related to inflation.
