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Analysts Maintained a Neutral Outlook on Target Stock

Amit Singh - Author

Nov. 20 2017, Updated 10:30 a.m. ET

Weak outlook to blame

Target (TGT) reported better-than-expected fiscal 3Q17 earnings. The company’s sales continued to improve due to higher traffic. Target raised its fiscal 2017 EPS (earnings per share) guidance by $0.06. However, a weak outlook for the significant holiday season led several analysts to lower their target price on Target stock.

Barclays lowered its target price on Target stock to $45 from $50 per share. Susquehanna lowered its target price to $54 from $58. Telsey Advisory Group reduced its target price to $58 from $60, while Jefferies reduced its target price to $59 from $60. Deutsche Bank lowered its target price to $53 from $59.

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Analysts maintained a neutral outlook

Most of the analysts continued to maintain a neutral outlook on Target stock. The company’s growth initiatives are expected to drive its top-line growth in upcoming quarters. However, earnings will likely remain pressured due to higher investments. Increased competition also pressures the company’s financials.

About 70.0% of the analysts maintained a “hold” recommendation on Target stock, 15.0% recommended a “buy,” and 15% recommended a “sell.” Target stock closed at $54.16 on November 15, 2017, which implies a potential upside of 8.0% to analysts’ target price of $58.47 per share.

In contrast, most of the analysts remain bullish on Costco (COST) stock. The risk-reward remains balanced for Walmart (WMT) stock.


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