US LNG exports surge but will buyers in China turn up?
On Tuesday, Citi reiterated its Neutral stance on Target Corporation (NYSE:TGT) shares, maintaining a $133.00 price target. The reaffirmation follows Target’s recent fourth-quarter earnings report, which exceeded consensus expectations, primarily due to lower-than-anticipated expenses. The retail giant, currently trading at a P/E ratio of 12.8x and near its 52-week low, appears undervalued according to InvestingPro analysis. Despite the earnings beat, comparable sales and gross margins met projections.
The company’s financial outlook for fiscal year 2025, with earnings per share (EPS) guidance set between $8.80 and $9.80, encompasses the consensus estimate of $9.29. With a strong dividend yield of 3.71% and a 54-year streak of dividend increases, Target maintains robust shareholder returns despite market challenges. The forecast is based on expectations for flat comparable sales, contrasting with a consensus estimate of a 1.6% increase. Additionally, management anticipates profit pressure in the first quarter, although no specific EPS guidance was provided. Factors contributing to this pressure include a sales decline in February, the timing of expenses, and the uncertainty surrounding tariffs. For deeper insights into Target’s financial health and growth prospects, InvestingPro subscribers can access comprehensive analysis and 8 additional key ProTips.
Target’s CEO, Brian Cornell, spoke on CNBC about the potential impact of tariffs on the company’s operations. Cornell highlighted that while Target has diversified its supply chain away from China in recent years, tariffs on Mexican imports could affect the prices of fruits and vegetables within a week.
Investors and analysts are looking forward to the upcoming conference call for further insights into Target’s current business trends and consumer behavior. The call is expected to provide more detailed information following the initial announcement of the company’s financial performance and outlook.
In other recent news, Target Corporation is set to release its fourth-quarter earnings soon, with Morgan Stanley (NYSE:MS) maintaining an Overweight rating and a price target of $160. The firm anticipates a cautious outlook for 2025, despite potential gains from holiday sales. Meanwhile, Citi has reiterated a Neutral rating on Target, projecting slightly better-than-expected fourth-quarter sales and earnings per share. Citi expects comparable store sales to rise by 1.8%, slightly above consensus estimates, but notes a recent slowdown in foot traffic that may affect future guidance.
Additionally, Target is facing a lawsuit from the state of Florida, alleging that the company concealed risks related to its diversity and social initiatives. This legal action follows a controversial Pride Month campaign and has led to the company ending its diversity, equity, and inclusion initiatives. In another development, Target has partnered with Warby Parker (NYSE:WRBY) to introduce in-store eyewear shops, starting in 2025. The collaboration aims to offer affordable, designer-quality eyewear and expand Target’s Optical business.
Finally, Bernstein has given Target a Market Perform rating with a $142 price target, expressing concerns about the company’s long-term ability to exceed sales and margin expectations.
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