S&P 500   5,022.21
DOW   37,753.31
QQQ   425.84
ASML Fires Warning Shot For Tech Investors
Checking in with 5 Bitcoin Stocks Ahead of Bitcoin's Halving
Lululemon’s P/E Is Back to 2017 Levels: Should You Buy the Dip?
Closing prices for crude oil, gold and other commodities
Abbott Laboratories Outlook is Healthy: Buy the Dip
Prologis Stock Leading U.S. Logistics Boom
Johnson & Johnson’s Q1 Checkup: Mixed Results, Optimism Remains
S&P 500   5,022.21
DOW   37,753.31
QQQ   425.84
ASML Fires Warning Shot For Tech Investors
Checking in with 5 Bitcoin Stocks Ahead of Bitcoin's Halving
Lululemon’s P/E Is Back to 2017 Levels: Should You Buy the Dip?
Closing prices for crude oil, gold and other commodities
Abbott Laboratories Outlook is Healthy: Buy the Dip
Prologis Stock Leading U.S. Logistics Boom
Johnson & Johnson’s Q1 Checkup: Mixed Results, Optimism Remains
S&P 500   5,022.21
DOW   37,753.31
QQQ   425.84
ASML Fires Warning Shot For Tech Investors
Checking in with 5 Bitcoin Stocks Ahead of Bitcoin's Halving
Lululemon’s P/E Is Back to 2017 Levels: Should You Buy the Dip?
Closing prices for crude oil, gold and other commodities
Abbott Laboratories Outlook is Healthy: Buy the Dip
Prologis Stock Leading U.S. Logistics Boom
Johnson & Johnson’s Q1 Checkup: Mixed Results, Optimism Remains
S&P 500   5,022.21
DOW   37,753.31
QQQ   425.84
ASML Fires Warning Shot For Tech Investors
Checking in with 5 Bitcoin Stocks Ahead of Bitcoin's Halving
Lululemon’s P/E Is Back to 2017 Levels: Should You Buy the Dip?
Closing prices for crude oil, gold and other commodities
Abbott Laboratories Outlook is Healthy: Buy the Dip
Prologis Stock Leading U.S. Logistics Boom
Johnson & Johnson’s Q1 Checkup: Mixed Results, Optimism Remains

Target Is Why Tech Will Boom In 2020?

Target Is Why Tech Will Boom In 2020?Target Reports Results And Blows Past The Consensus

Target (TGT) reported earnings this morning and led me to a singular conclusion; tech is going to boom this year. I’m sure by now you’re thinking that I’m either crazy, Target is doing something behind the scenes you don’t know about, or maybe I’m on to something.

To clear up any confusion, Target is not doing something behind the scenes you don’t know about and I'm not crazy. Target is not going to single-handedly lift the entire tech sector but its results are an example of something I’ve been writing about the entire pandemic. The shift to tech, technological adoption by the masses, and eCommerce are getting a boost from the pandemic that will last well, they'll last forever.

Comps Dazzle Despite Lock-Downs, Can You Guess Why?

Target reported results this morning and beat consensus on the top and bottom lines. The company reported an 11.3% increase in YOY revenue that exceeded consensus by 300 basis points. The strength in earnings carried through to bottom-line despite increased costs related to employment and distancing measures. Adjusted EPS came in at $0.59, $0.19 above consensus, while GAAP EPS of $0.56 beat by $0.10.

Regarding comps, comps grew by 10.8%, more than 300 basis points above expectations, driven in part by pantry-loading and accessibility. The comps are driven more by Target's eCommerce platform Target has a high-quality eCommerce platform thanks to its competition with Amazon and that platform is backed up by same-day pickup services. eCommerce sales grew by 141% in the quarter and are expected to be strong in Q2 as well.


  • eCommerce is the ultimate form of social distancing. If you don't want to go out, or get close to people, just use eCommerce and have it delivered.

Credit Suisse reiterated its Outperform rating on Target due to the results and preliminary Q2 outlook. eCommerce sales in April topped the +280% mark and show no signs of abating. According to analyst Seth Sigman, the company is well-positioned to ride out the post-pandemic period as its competitors continue to struggle with disruption. What he means is, Target will outperform and gain market share while all those other retailers not prepared to compete in eCommerce struggle to catch up.

The Need To Compete Is Why Tech Will Boom

If you aren’t clear on why Target will lead Tech to boom in 2020 let me spell it out. It’s because Target is proving eCommerce and digitization is the only way to compete in the post-pandemic world. Because Target is ahead of the game retailers in the grocery, home goods, apparel, and consumer staples segment need to catch up or face irrelevance. And that’s just the tip of the iceberg, businesses in virtually all sectors and industry are in the same boat so to speak. Woefully behind in their need to adopt technology in any form.

One way to play this boom is Accenture (ACN). Accenture is the world’s leading business consulting firm and a specialist in business technology. The company operates in five segments covering all business industries and has working relationships with all major technology providers. When the business world needs help restructuring, adopting, or upgrading technology Accenture is one of the first names to call.

Accenture is expected to grow revenue and earnings this year, next year, and the next 5 years at least. This year revenue should come in about 2.7% higher, EPS about 4.0%, with those figures accelerating to 5.8% and 6.5% next year. Earnings are used to fuel growth and pay a dividend which, at today’s prices, yields about 1.65%. The company has a history of dividend increases and a low 41% payout ratio so there is some expectation for future increases.

The Technical Outlook: Bullish With Freshly Set New Highs

The technical outlook for Accenture is bullish. The company has been recovering steadily since hitting bottom in March and just broke to new highs. The break-out is supported by the indicators which are both firing bullish crossovers in tandem with a nice-looking bounce from the short-term moving average. There is a risk that prices will fall to retest support but, if so, it would be a buying opportunity provided no bad news is involved. Otherwise, this stock looks like it will soon be retesting the 2020 highs which are, by coincidence, the current all-time highs. I won’t be surprised if new all-time highs are set before the end of the year.

Target Is Why Tech Will Boom In 2020?

Where should you invest $1,000 right now?

Before you make your next trade, 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.

Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.

They believe these five stocks are the five best companies for investors to buy now...

See The Five Stocks Here

7 Stocks That Could Be Bigger Than Tesla, Nvidia, and Google Cover

Growth stocks offer a lot of bang for your buck, and we've got the next upcoming superstars to strongly consider for your portfolio.

Get This Free Report
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. 


Featured Articles and Offers

Search Headlines: