Target today
(as of 11/29/2024 ET)
- 52-week range
- $120.21
▼
$181.86
- Dividend yield
- 3.39%
- P/E ratio
- 14.03
- Price target
- $160.30
While target NYSE: TGT While the health of the retail sector has been ringing in recent years, it is not today. The company’s poor results are due to its operational quality and lack of relevance in an environment where consumers are budget conscious. Results from Other retailersincluding Walmart NYSE: WMT, TJX Companies NYSE: TJXAnd Williams-Sonoma NYSE: WSMShow them growing, maintaining margin strength or widening margins and providing a healthy outlook for these trends to continue. The former target of consumer health is that strong labor trends point to a healthy spending season, with growth expected to exceed consensus estimates.
Target’s results aren’t all bad: Shares hit a rock bottom price point
the goal The results are weak Compared to analyst forecasts and industry averages, but not all bad for investors. The company maintained growth with revenue of $25.67 billion, up 1.15% year-over-year. The gain was on a 0.3% comp, driven by a 2.4% increase in traffic and a 10.8% increase in digital sales. Regarding brick-and-mortar transportation, beauty, food and beverage, and everyday remain areas of strength.
Margin news is also mixed with contraction, compounding top line weakness. Gross margin contracted by 20 bps and operating margin by 60 due to higher inventory costs, supply chain costs, and digital fulfillment. The net result is adjusted EPS of $1.85, 2000 basis points shy of consensus but still enough to sustain it. Financial health of the company and capital returns.
Guidance is equally poor, with comps expected to be flat compared to last year and positive forecasts from its competitors. However, the guidance calls for sufficient EPS to maintain the capital return program if it lowers the outlook for buyback momentum. The full-year adjusted EPS target of $8.90 is $.60 shy of the consensus reported by MarketBeat.com but provides a sustainable dividend payout ratio of 52%.
A target’s balance sheet and cash flow can sustain capital returns
Target MarketRank™ Stock Analysis
- Overall MarketRank™
- 99th percentile
- Analyst rating
- catch up
- upside/downside
- Up 21.2%
- Low interest rate
- healthy
- The power of dividends
- stronger
- Environmental score
- -1.81
- Sense of news
- -0.21
- Insider trading
- Selling shares
- Prof. Increase in earnings
- 8.49%
Capital returns in Q3 included $516 million in dividends and another $354 in buybacks. With annualized returns priced above 3.5%, shares trade near long-term lows. Buybacks reduced the share count, down 0.2% for the quarter, and are expected to continue, if at a slower pace, until earnings quality improves.
Cash flow and balance sheet highlights are good. The company’s cash flow was negative for the quarter but offset by YTD strength; Cash is high, inventory is up, current and total assets are high, and liabilities are flat. Long-term debt leverage remains low at just 1x equity, and equity is growing, up 15% over the past year.
Analyst sentiment weighs on the target stock price
initial Answers from analysts Including two downgrades and price target cuts, not good, but it could be worse. The new ratings are Hold, below Buy, with targets of $108 and $130. The mid-point of that range corresponds to recent stock price lows and can provide a floor for the market. If not, this stock could set new lows and go down significantly from there. In that scenario, Target’s shares could enter a sustained decline from which it may never recover.
The likely scenario is that support will remain Below the trading limitThat corresponds to a long-term moving average that has previously provided support. In this scenario, the target’s stock price may decline to near current levels until more news becomes available. As economic conditions are expected to ease in 2025 and tailwinds are expected to develop, Target’s business and stock price may begin to improve by the middle of next year.
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