QQQ   439.00 (+0.86%)
AAPL   180.75 (-0.37%)
MSFT   413.64 (+1.45%)
META   490.13 (+1.26%)
GOOGL   138.46 (+1.53%)
AMZN   176.76 (+2.08%)
TSLA   201.88 (-0.08%)
NVDA   791.12 (+1.87%)
NIO   5.74 (+5.71%)
AMD   192.53 (+9.06%)
BABA   74.02 (-0.76%)
T   16.93 (-0.18%)
F   12.43 (+1.06%)
MU   90.61 (+1.00%)
CGC   3.29 (-2.08%)
GE   156.83 (+0.78%)
DIS   111.51 (+0.64%)
AMC   4.34 (-13.21%)
PFE   26.55 (-1.81%)
PYPL   60.34 (+0.15%)
XOM   104.52 (+0.19%)
QQQ   439.00 (+0.86%)
AAPL   180.75 (-0.37%)
MSFT   413.64 (+1.45%)
META   490.13 (+1.26%)
GOOGL   138.46 (+1.53%)
AMZN   176.76 (+2.08%)
TSLA   201.88 (-0.08%)
NVDA   791.12 (+1.87%)
NIO   5.74 (+5.71%)
AMD   192.53 (+9.06%)
BABA   74.02 (-0.76%)
T   16.93 (-0.18%)
F   12.43 (+1.06%)
MU   90.61 (+1.00%)
CGC   3.29 (-2.08%)
GE   156.83 (+0.78%)
DIS   111.51 (+0.64%)
AMC   4.34 (-13.21%)
PFE   26.55 (-1.81%)
PYPL   60.34 (+0.15%)
XOM   104.52 (+0.19%)
QQQ   439.00 (+0.86%)
AAPL   180.75 (-0.37%)
MSFT   413.64 (+1.45%)
META   490.13 (+1.26%)
GOOGL   138.46 (+1.53%)
AMZN   176.76 (+2.08%)
TSLA   201.88 (-0.08%)
NVDA   791.12 (+1.87%)
NIO   5.74 (+5.71%)
AMD   192.53 (+9.06%)
BABA   74.02 (-0.76%)
T   16.93 (-0.18%)
F   12.43 (+1.06%)
MU   90.61 (+1.00%)
CGC   3.29 (-2.08%)
GE   156.83 (+0.78%)
DIS   111.51 (+0.64%)
AMC   4.34 (-13.21%)
PFE   26.55 (-1.81%)
PYPL   60.34 (+0.15%)
XOM   104.52 (+0.19%)
QQQ   439.00 (+0.86%)
AAPL   180.75 (-0.37%)
MSFT   413.64 (+1.45%)
META   490.13 (+1.26%)
GOOGL   138.46 (+1.53%)
AMZN   176.76 (+2.08%)
TSLA   201.88 (-0.08%)
NVDA   791.12 (+1.87%)
NIO   5.74 (+5.71%)
AMD   192.53 (+9.06%)
BABA   74.02 (-0.76%)
T   16.93 (-0.18%)
F   12.43 (+1.06%)
MU   90.61 (+1.00%)
CGC   3.29 (-2.08%)
GE   156.83 (+0.78%)
DIS   111.51 (+0.64%)
AMC   4.34 (-13.21%)
PFE   26.55 (-1.81%)
PYPL   60.34 (+0.15%)
XOM   104.52 (+0.19%)

Is Target Stock Aiming For A Breakout In 2023? 

Target stock earnings

Key Points

  • Target beat on the top and bottom lines but failed to impress with its guidance. 
  • The dividend is safe and growing in 2023. 
  • Analyst sentiment may cap gains in the near to mid-term. 
  • 5 stocks we like better than Target

The answer is probably not soon when Target Corporation NYSE: TGT breaks out of its trading range. Several factors could hold the market back in 2023, but this is an opportunity for long-term investors. The declining outlook for earnings, valuation, and tepid analyst activity may keep the stock range-bound this year, but the long-term outlook is bright. The company says it is on track to recoup its prepandemic margins and may surpass that level in 2024.

This means a rebound in price action is brewing, although it may take a few more quarters to play out. Between now and then investors can target technically appropriate entry points within the range to use as entry points for building a position. The stock is yielding a healthy 2.6% while trading at current levels and comes with a positive outlook for distribution increases and share repurchases. 

Target, Strong In Q4 But Guiding Weak For 2023 

Target’s Q4 results and outlook confirm a trend driving the retail market for the last 2 years. The underlying strength in the economy drives better-than-expected results despite the post-pandemic slowdown, but a cliff is fast approaching. The company’s guidance suggests that consumer trends will slow dramatically across the retail and consumer landscape in 2023 and the depth of the pullback is yet to be plumbed.

Considering the heights of the post-pandemic peak and the amount of momentum we’re still seeing it is possible the pullback could accelerate to a comparable level. Until then, Target reported solid revenue and earnings for Q4 despite the heavy impact of markdowns and promotions. 

Target reported $31.48 billion in revenue for a gain of 1.3%. Interestingly, the gains were driven by a 0.7% increase in comp store traffic the company says is all volume. Same-day services were also strong, e-commerce, and grew by 4.3% YOY to account for 10% of the revenue.

Margins contracted at levels, however, as inventory-clearing activities, higher costs and increased shrinkage cut into the bottom line. Shrinkage is something to note; this is at least the 2nd major retailer to report this as a growing problem, and it will worsen before it gets better. The good news is that Q4 adjusted earnings came in at $1.89 or $0.49 better than expected which offsets some of the decline. On a YOY basis, earnings are down 40%. 


The guidance is the troubling detail in the report. The company is guiding a range for revenue and earnings so broad as to introduce significant uncertainty into the equation. To finish, the guidance is well below the Marketbeat.com consensus figures at the high end of the ranges, which means Target will have to perform very strongly even to match what the market expects.

The bottom line is that Target is due for a revaluation that could start with the analysts. 

The Analyst's Sentiment Toward Target Slipping 

The analyst's sentiment toward Target began to slip at the end of last year and may continue in 2023. No new commentaries have shown up on Marketbeat’s analyst tracking tools yet, which is no surprise given the surprise guidance; it may take them a day or 2 to fully digest the outlook, but the pre-release activity has sentiment and the price target edging lower.

The analysts have Target pegged at a Moderate Buy with a target at the top of the current trading range. Any downward pressure in the price target will help keep this market moving sideways. 

The post-release action is mixed, the stock has been up and down and flat throughout the morning, but the bias is downward. The 150-day EMA may provide support but, if not, a test of the lower end of the trading range is likely. Strong support is possible near $165, but the firmer targets are near $146 and $140. 


→ Critical asset just had biggest fall on record (From Stansberry Research) (Ad)

Should you invest $1,000 in Target right now?

Before you consider Target, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Target wasn't on the list.

While Target currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
TJX Companies (TJX)
3.9862 of 5 stars
$99.08-2.0%1.34%28.07Moderate Buy$101.38
Target (TGT)
4.6628 of 5 stars
$152.93+1.0%2.88%19.51Hold$155.50
Compare These Stocks  Add These Stocks to My Watchlist 

Thomas Hughes

About Thomas Hughes

  • tmhughes.writeon@gmail.com

Contributing Author

Technical and Fundamental Analysis

Experience

Thomas Hughes has been a contributing writer for MarketBeat since 2019.

Areas of Expertise

Technical analysis, the S&P 500; retail, consumer, consumer staples, dividends, high-yield, small caps, technology, economic data, oil, cryptocurrencies

Education

Associate of Arts in Culinary Technology

Past Experience

Market watcher, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights. 


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