General merchandise retailer Target (NYSE:TGT) rolled out its earnings report ahead of trading this morning, and gained as much as 3.8% in premarket trading, holding on to those gains going into today's session. The earnings report featured beats for both earnings and revenue, and with strong analyst consensus backing further investment, there are several good signs accompanying the retailer that has already demonstrated its ability to survive even a pandemic.
Target Earnings Report Delivers on Every Front
The Target Q1 earnings report brought plenty of impact with it, as the company beat estimates for earnings, revenue, and comparable-store sales. The company rolled out earnings per share (EPS) figures of $3.69, as compared to FactSet's projection of $2.25 and Investing.com's projection of $2.16.
The company also delivered beats for revenue, which came in at $24.2 billion for the quarter, easily beating the Investing.com projection of $21.47 billion. Target's revenue for the first quarter of 2021 beat the first quarter of 2020, which was still at least somewhat pre-pandemic, by over 23%, reports noted.
Perhaps the real winner was comparable store sales, which were up almost 23%. That beat FactSet's projections for sales by roughly double what it had forecast. Digital sales were still strong, as sales were up 50% for the same period compared. Several sectors saw larger growth, as apparel sales were up 60% after a roughly 20% decline in the year previous. Home products, meanwhile, were up around 30% over the previous year, and Target's sales of owned brands—like All in Motion activewear—were up 36%. That represented a new record for the company, reports noted.
The biggest reason for such gains, as noted by Brian Cornell, Target's CEO, was a combination of consumer confidence coupled with a desire for return to normalcy. Cornell noted that Target's Mother's Day sales were some of the strongest the company had seen in years as shoppers fulfilled their urges to get out, visit family, and celebrate motherhood once more.
What Are Financial Analysts Saying About TGT Stock?
While shoppers are flooding Target stores to buy once more, so too are financial analysts looking to buy Target stock. Currently, Target stock has a consensus rating of “buy”, and that consensus has held for the last two years.Bullish sentiment on Target has slipped somewhat in recent months, though not enough to budge the consensus off its “buy” assessment. A year ago, the company had two “strong buy” ratings, 19 “buy”, and four “hold” to its credit. Six months ago, that improved to two “strong buy”, 20 “buy”, and six “hold”. Today, however, we're at one “strong buy”, 15 “buy” and five “hold”, which suggests several analysts pulling out altogether rather than much shift in overall bullish sentiment.
Target share price targets, meanwhile, exist in a pretty broad range. The current average is $188.42, and that features a high of $235 and a low of $120. With Target stock currently trading at $213.27 as of this writing, some downside potential is present.
The most recent developments for Target, though, have been universally positive. Target stock hasn't seen a lowered price target in over two months, back when Robert W. Baird reduced the target from $220 to $200. Less than a week after, though, Guggenheim upgraded Target from “neutral” to “buy”, and that started a flood of positive news that lasted as recently as yesterday, when Morgan Stanley boosted Target's share price target from $195 to $205, despite ranking the stock “equal weight.” The new high for Target, the aforementioned $235, was also a recent product, coming in on May 14 as Telsey Advisory Group increased its target from $215 to $233. The low, meanwhile, may be a stale item as it came from CFRA back in May 2020. Even that, however, was the result of a price target boost that saw the target raised from $115 to $120.
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