Target Corp (TGT)

[DiscoverGold]

Here's How Target (TGT) Looks Just Ahead of Q1 Earnings
By: Zacks Equity Research | May 16, 2022

Target Corporation (TGT) is likely to register a marginal increase in the top line when it reports first-quarter fiscal 2022 results on May 18, before market open. The Zacks Consensus Estimate for revenues is pegged at $24,460 million, indicating growth of 1.1% from the prior-year reported figure.

The bottom line of this general merchandise retailer is anticipated to decline year over year. Although the Zacks Consensus Estimate for earnings per share for the quarter under review has increased 1.4% to $3.00 over the past seven days, the figure still suggests a decline of 18.7% from the year-ago period.

Target has a trailing four-quarter earnings surprise of 21.3%, on average. In the last reported quarter, this Minneapolis, MN-based company surpassed the Zacks Consensus Estimate by 11.5%.

Key Factors to Note

Target has been deploying resources to enhance omni-channel capabilities, come up with new brands, refurbish stores and expand same-day delivery options to provide customers a seamless shopping experience. Markedly, it has been ramping up store openings and remodels, scaling up fulfillment services and enhancing supply chain capabilities. Customers have been opting for Target owing to its multi-category assortment of owned and exclusive brands as well as popular national brands.

However, Target is likely to have witnessed a modest acceleration in sales as soaring inflation has been pinching consumers’ pockets. Again, the company is up against last year’s record government stimulus that spurred demand above pre-pandemic levels. Also, digital comparable sales might have been soft compared with the year-ago period.

Meanwhile, demand is likely to have been skewed more toward essentials, which carry lower margins. Again, the impact of costs associated with digital fulfillment, supply chain and COVID-related expenses cannot be ruled out. We note that higher merchandise and freight costs hurt the gross margin in the last-reported quarter.

Target Corporation Price, Consensus and EPS Surprise



What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Target this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Target has an Earnings ESP of -0.93% and a Zacks Rank #2.

Read Full Story »»»

DiscoverGold