Fubotv earnings beat by $0.10, revenue topped estimates
On Wednesday, Bernstein analysts, led by Zhihan Ma, revised their price target for Target Corporation (NYSE:TGT) shares, reducing it to $124.00 from the previous figure of $142.00. Despite the adjustment, they maintained a Market Perform rating on the retail giant’s stock, which currently trades at $117.14, near its 52-week low of $112.53. According to InvestingPro analysis, Target appears undervalued at current levels. The decision came after Target reported its fourth-quarter earnings for 2024 on Tuesday, which included a modest earnings per share (EPS) beat that the analysts described as "low quality."
Target’s recent financial disclosure also offered a forecast for fiscal year 2025, indicating a broad range of possible outcomes. While acknowledging that Target is currently benefiting from relatively easy year-over-year comparisons, Bernstein’s analysts expressed concern over the company’s medium- to long-term prospects. They specifically questioned Target’s ability to simultaneously increase sales and profitability, despite maintaining robust annual revenues of $106.57 billion and a gross margin of 28.21%. InvestingPro subscribers can access 10+ additional key insights about Target’s financial health and growth prospects.
The analysts highlighted that although Target has several strategies to potentially improve its gross margin—such as reducing shrinkage, enhancing category mix, and growing alternative revenue—these efforts would require investments that could dilute margins. For example, to stimulate sales growth, Target would need to invest in competitive pricing and e-commerce expansion, both of which could negatively impact profit margins.
In comparison to Walmart (NYSE:WMT), the analysts noted that Target has less potential for e-commerce margin improvement due to its smaller scale and limited investments in automated fulfillment capabilities. Despite these challenges, they reaffirmed their Market Perform rating for Target’s stock, setting the new price target at $124.00. Trading at a P/E ratio of 13.63, Target maintains its position as a dividend aristocrat, having raised its dividend for 54 consecutive years. For detailed valuation metrics and comprehensive analysis, investors can access Target’s full research report on InvestingPro.
In other recent news, Target Corporation’s fourth-quarter earnings reports and future financial guidance have prompted several analysts to adjust their price targets. Piper Sandler lowered its price target from $132 to $124, maintaining a Neutral rating, after noting Target’s slight underperformance in its financial guidance for 2025. The company saw a 1.5% increase in comparable sales, though February sales were softer due to adverse weather and consumer confidence issues. JPMorgan also revised its price target down to $140 from $146, while keeping a Neutral rating, highlighting Target’s strategy to enhance customer experience and expand its marketplace.
Evercore ISI reduced its price target to $130, maintaining an In Line rating, and acknowledged Target’s positive traffic growth despite broader market challenges. Goldman Sachs cut its price target to $142 from $166 but maintained a Buy rating, emphasizing potential growth in apparel sales and Target’s revenue growth goals over the next five years. Telsey Advisory Group reiterated an Outperform rating with a $67 target, praising Target’s strong fourth-quarter performance and significant growth in its direct-to-consumer sales.
Target’s strategic efforts, including investments in product offerings and supply chain improvements, were noted across the board, though analysts expressed varying levels of caution regarding the company’s ability to meet its financial targets. The company’s minimal exposure to Chinese tariffs and expansion in the Asia-Pacific region were highlighted as positive aspects. Despite some concerns, several analysts remain optimistic about Target’s long-term growth potential.
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