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Target: Analysts’ Expectations in Q1

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Analysts’ consensus estimate

Target (TGT) is scheduled to post its first-quarter results on May 22. Analysts expect Target to post an adjusted EPS of $1.43 on revenues of $17.5 billion. Analysts expect the continued improvement in comparable sales to support the revenues. Expanded digital fulfillment options, store remodeling, a focus on merchandising, and value pricing will likely drive the traffic, ticket size, and comps. Higher comps, share repurchases, and low-interest expenses are expected to support Target’s bottom line.

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The continued momentum in the base business and low valuation are expected to support Target stock. However, higher digital fulfillment costs and increased wages are expected to hurt the company’s margins and stock. Investments in growth initiatives will likely remain a drag. Target’s profit margins are expected to stay subdued.

Target’s stock performance

Target shares took a beating in the past month, which you can see in the above graph. However, the stock has risen 9.1% in 2019 due to the continued momentum in the company’s comps. In comparison, higher comps and momentum in earnings supported Walmart (WMT) and Costco (COST) stock. Walmart stock has risen 9.0% on a YTD (year-to-date) basis. Costco shares have risen 22.2% in 2019.

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