Target’s Stock To Trade Higher Post Q1 Results?
Share this @internewscast.com


Target (NYSE: TGT), the second-largest discount chain in the U.S., is scheduled to report its fiscal first-quarter results on Wednesday, May 18. We expect Target’s

TGT
stock to likely trade higher due to revenue and earnings beating market expectations. Target’s annual sales grew 35% to $106 billion in 2021 compared to $78 billion two years ago – and it continues to make inroads with its digital sales. Almost $13 billion in digital sales was generated between 2019 and 2021. We expect Target to keep up the momentum in the upcoming quarter as well. According to the retailer, the Q1 margin will be below the prior year’s record mark of 9.8%. That said, even if profit drops to 8% of sales, that still means a higher profit margin than seen in Q1 2019. For the full year of 2022, Target expects its sales to rise by around 5% year-over-year (y-o-y), largely implying that the company will retain most of the extra market share it accumulated during the earlier phases of the pandemic.

Our forecast indicates that Target’s valuation is $244 per share, which is 14% higher than the current market price. Look at our interactive dashboard analysis on TGT’s Earnings Preview: What To Expect in Q1? for more details.

(1) Revenues expected to be slightly ahead of consensus estimates

Trefis estimates Target’s Q1 2022 revenues to be around $25.2 Bil, slightly ahead of the consensus estimate. In Q4, the company’s comparable sales rose 8.9% during the quarter on top of a 20.5% increase a year ago. In addition, its digital sales rose 9.2% during the quarter. Target handled 8% more transactions in Q4 while average order spending rose. To put things into perspective, Walmart’s

WMT
traffic during the holidays increased by 3%. Going forward, we expect Target Revenues to reach $110 billion in fiscal 2022. As part of its long-term growth strategy, the company has pledged to invest as much as $5 billion this year in digital and physical store experiences, fulfillment, and supply chain management.

(2) EPS likely to be marginally ahead of consensus estimates

TGT’s

GT
Q1 2022 earnings per share is expected to be $3.21 per Trefis analysis, marginally above the consensus estimate. In Q4, Target’s gross profit margin fell to 26% of sales from 27% a year ago while expenses shrank slightly as a percentage of sales. Despite soaring labor and transportation costs, the company’s increasing market share offset inflationary pressures. As a result, bottom-line profitability rose, landing at 6.8% of sales compared to 6.5% in Q4 2020. The retailer’s earnings per share rose 17% y-o-y to $3.24 per share, boosted by the management’s stock buyback spending.

(3) Stock price estimate higher than the current market price

Going by our Target’s Valuation, with an EPS estimate of around $14.63 and a P/E multiple of 16.6x in fiscal 2022, this translates into a price of $244, which is 14% higher than the current market price.

It is helpful to see how its peers stack up. TGT Peers shows how Target’s stock compares against peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Invest with Trefis Market Beating Portfolios

See all Trefis Price Estimates

Share this @internewscast.com
You May Also Like

Living longer lives in the world of Web3

Expected to reach a market size of $128 billion by 2028, the…

‘The Boys’ Just Pulled Off Its Best Twist Of The Series In Episode 7

Soldier Boy Amazon I continue to be deeply impressed with The Boys…

Ashanti aims to bring women to Web3, says “owning is important” at NFT music meetup

The billion-dollar music industry is undergoing a major transition as artists begin…

MIDAS SHARE TIPS: Profit from global car dealer Inchcape

Just over two weeks ago, Inchcape, the car dealership and sales group,…

Joe Joyce Vs. Christian Hammer: Odds, Records, Prediction

LONDON, ENGLAND – NOVEMBER 28: Joe Joyce punches Daniel Dubois during the…

Kohl’s Ends Talks Over Its Sale to Vitamin Shoppe Owner Franchise Group

Kohl’s called off talks over its $8 billion sale to Franchise Group…

Bitcoin trader says expect more chop, downside, then sideways price action for BTC this summer

Discussion of the state of the crypto market has been a dominant…

Twice Member Nayeon Becomes The First K-Pop Soloist To Chart A Top 10 Album In America

SEOUL, SOUTH KOREA – AUGUST 13: Nayeon of girl group TWICE attends…