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Target: How Analysts Reacted to Its Q4 Results


Mar. 6 2019, Published 11:51 a.m. ET

Higher target price

Target’s (TGT) better-than-expected fourth-quarter performance and upbeat comps and earnings guidance led several analysts to raise their target price on the stock. Credit Suisse increased its target price on Target stock to $85 per share from $79. J.P. Morgan raised its target price to $81 from $75. Jefferies increased its target price to $84 from $79.

Target’s expanded delivery options, new and exclusive products, store remodeling, opening small-format stores, and right pricing are expected to drive the traffic at its stores and on its digital platform. Cost savings are expected to support the operating income. Target’s bottom line is expected to sustain the momentum in fiscal 2019 despite facing tough comps, which is impressive. Continued comps growth and share repurchases are expected to drive high-single-digit growth in Target’s bottom line.

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Analysts’ ratings and target price

Among the 25 analysts tracking Target, 15 recommended a “hold,” nine recommended a “buy,” and one recommended a “sell.” Weakness in Target’s margins and more competition in the grocery business have kept analysts on the sidelines. Analysts also maintained a neutral outlook on Walmart (WMT) stock. However, analysts have a “buy” rating on Costco (COST) stock.

Analysts have a consensus target price of $84.97 per share on Target stock, which implies an upside potential of 11.8% based on its closing price of $76 on March 5.


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