Target Corporation Gears Up for Q4 Earnings amid Profit Declines

Target Corporation (TGT), valued at $63.2 billion, stands as a leading retail player, catering to millions across the U.S. The company, based in Minneapolis, operates a diverse array of stores and a robust online shopping platform. Customers can find a variety of affordable products, from essentials to home goods, clothing, and groceries. As anticipation builds, Target is scheduled to reveal its Q4 earnings on Tuesday, March 4.

Analysts Predict a Profit Decrease

Analysts are forecasting that Target will report a profit of $2.23 per share on a diluted basis. This figure represents a decline of 25.2% compared to $2.98 per share from the same quarter last year. In the last four quarters, Target succeeded in surpassing expectations twice but fell short on two occasions. During fiscal Q3, the company posted an adjusted EPS of $1.85, which was 19.2% below consensus estimates. This shortfall was largely attributed to rising costs and pressure on profit margins.

Full-Year Earnings Outlook

For the entire fiscal year, analysts forecast a profit of $8.69 per share for Target, marking a 2.8% decrease from $8.94 in fiscal 2023.

Underperformance in Stock Market

Over the last 52 weeks, Target’s shares have experienced a slight decline, significantly lagging behind the S&P 500 Index’s 22.9% gains and the Consumer Staples Select Sector SPDR Fund’s (XLP) 10.2% gains.

Challenges Following Q3 Report

Following the release of its Q3 earnings on November 20, Target’s stock dropped nearly 22%. Although revenue increased by 1.1% year-over-year to reach $25.7 billion, operating income saw an 11.2% decline to $1.2 billion. The margin rate decreased to 4.6%. Comparable sales grew by 0.3%, fueled by a notable 10.8% rise in digital sales, which balanced out a 1.9% decrease in store sales. Profit margins faced pressure from higher supply chain and inventory costs, although disciplined cost management helped somewhat alleviate the situation.

Analysts’ Insights on TGT Stock

The consensus view among analysts regarding TGT stock is cautiously optimistic, with an overall “Moderate Buy” rating. Of the 33 analysts following the stock, 14 recommend a “Strong Buy,” three advocate for a “Moderate Buy,” 15 suggest “Hold,” and one advises a “Strong Sell.” The average price target set by analysts is $148.12, indicating a potential growth opportunity of 3.9% from current price levels.

On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here. More news from Barchart

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.