Target's Earnings: Expectations and Investor Tips

Target Announces Earnings Results

Target (NYSE:TGT) will announce its earnings results this Wednesday morning. Last quarter, it reported revenues of $25.21 billion, exceeding analysts' revenue expectations by 1.3%. This result was stable compared to the previous year, making it a satisfactory period for the company. However, while the company's annual earnings per share (EPS) guidance exceeded analysts' estimates, it did not meet the predictions for earnings before interest, taxes, depreciation, and amortization (EBITDA).

Target's revenues seem willing to meet analysts' expectations for this quarter. Analysts expect the company's revenue to decrease by 1.3% year-over-year, totaling $25.32 billion. Adjusted earnings are anticipated to be $1.72 per share. Over the last 30 days, analysts following the company generally reaffirmed their estimates, indicating they believe the business will maintain its course before the earnings announcement.

Over the past two years, Wall Street has missed revenue estimates for Target three times, and the company is going through a challenging period compared to notable competitors. Some competitors have announced their third-quarter results, providing clues about what Target might expect. For instance, Sprouts reported a 13.1% year-over-year revenue increase but missed analysts' expectations by 1.1%; Grocery Outlet reported a 5.4% increase but fell short by 0.8% of the forecasts. Following the results, Sprouts experienced a 26.3% decline, while Grocery Outlet fell by 8%.

While the enthusiasm from Trump’s victory in November spurred major indices, potential tariffs slated for 2025 could reverse the market. Although retail stocks in some essential consumer sectors have shown strong performance in this volatile environment, overall stock prices have dropped by an average of 8.9% over the last month. During this period, Target experienced a 2.9% loss, and before the earnings announcement, analysts' average price target was $100.70, while the current stock price is at $88.75.