Target’s Stock Takes a Hit but Analysts See Hope Ahead
With a market cap of around $62 billion, Minneapolis-based Target Corporation (TGT) stands as a prominent player in the general merchandise retail sector. Alongside its retail products, Target aims to improve the shopping experience by offering amenities like Starbucks, Target Optical, and various food services.
Target’s Standing in the Market
Well over the threshold for “large-cap” stocks, which are typically valued at $10 billion or more, Target has undergone significant changes. The company has transitioned into an omni-channel operation, modernizing its supply chain and adding services such as same-day delivery via the acquisition of Shipt.
Recent Stock Performance Draws Concern
Despite its robust market status, TGT shares have fallen 25.3% from their 52-week high of $181.86. In the last three months, the stock has seen an 8.2% decline, contrasting sharply with the broader Nasdaq Composite’s ($NASX) 16.3% return in the same timeframe.
Looking at the year-to-date figures, TGT has decreased by 4.6%, trailing the NASX, which has advanced 31.9%. Over the past year, TGT’s stock has only edged up slightly, while NASX’s return was 37.5%.
Challenges Faced
Since mid-November, Target’s stock has been trading below both its 50-day and 200-day moving averages. On November 20, TGT’s shares dropped nearly 22% following a disappointing Q3 FY2024 earnings report. The company reported an adjusted EPS of $1.85 and revenue of $25.7 billion, missing consensus estimates. Additionally, Target revised its full-year forecast down, from $9.35 to a midpoint of $8.60 per share, citing weak performance in discretionary items and higher costs stemming from inventory purchases due to port strike worries. Consequently, Wall Street reacted with downgrades, including Citigroup’s decision to change its rating to “hold” with a new price target of $130.
Comparative Performance With Rivals
In contrast, Dollar General Corporation (DG) has not fared well either, declining 35.2% over the past year and 39.4% year-to-date.
Analysts Maintain Optimism
While TGT underperformed relative to the Nasdaq over the last year, analysts are moderately hopeful. A consensus rating of “Moderate Buy” emerges from 33 analysts. The mean price target of $145.50 indicates a 7.3% upside potential from current trading levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
