US LNG exports surge but will buyers in China turn up?
On Monday, Citi reiterated a Neutral rating on Target Corporation (NYSE:TGT) shares, maintaining a price target of $133.00. The retail giant, currently trading with a P/E ratio of 13.11 and offering a 3.61% dividend yield, has caught the attention of analysts. According to InvestingPro, 11 analysts have recently revised their earnings estimates upward for the upcoming period. Citi’s analyst projected fourth-quarter sales and earnings per share (EPS) to be slightly above the consensus estimates. They forecast comparable store sales (comps) to increase by 1.8%, compared to the consensus of 1.4% and Target’s own guidance of 1.5%, as announced on January 16 during their holiday sales release. The company, with its $57.13 billion market capitalization, has demonstrated resilience despite trading near its 52-week low of $120.21.
The analyst expects Target to report a fourth-quarter EPS of $2.30, which is marginally higher than the FactSet consensus of $2.25. However, Citi’s foot traffic data have shown a slowdown in the last week of January and into the second week of February. This deceleration may influence management’s guidance for fiscal year 2025 (F25).
For F25, the analyst anticipates Target will provide comparable sales guidance ranging from 0% to 2%, which is slightly more conservative than the consensus estimate of a 1.6% increase. Additionally, they estimate an EPS guidance between $8.50 and $9.50, lower than the consensus of $9.27. This cautious outlook is attributed to the potential wide range of outcomes in F25, given the uncertain macroeconomic and competitive landscape.
The analyst believes that the risk/reward balance for Target’s stock is even as investors approach the earnings call, suggesting that current expectations and the company’s valuation are in alignment. The guidance provided by Target’s management in the upcoming earnings call will be closely watched, especially in light of the recent deceleration in foot traffic and the cautious stance on the future fiscal year’s performance. InvestingPro analysis suggests Target is currently undervalued, with additional insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of this retail leader among 1,400+ top US stocks.
In other recent news, Target Corporation is facing a lawsuit from the state of Florida, alleging that the company concealed risks related to its diversity and social initiatives, leading to customer backlash. The lawsuit claims that Target made false statements about its environmental, social, and governance mandates, which allegedly culminated in a controversial Pride Month campaign in May 2023. In response to these developments, Target announced the conclusion of its diversity, equity, and inclusion programs, while emphasizing its commitment to fostering a sense of belonging among its team and communities.
Analysts have been adjusting their outlooks on Target. Bernstein raised its price target for Target to $142, maintaining a Market Perform rating, while noting challenges in the company’s pricing strategies and e-commerce profitability. Guggenheim also increased its price target to $155, holding a Buy rating, following strong sales performance during the holiday season, with a notable 2.8% rise in total sales for November and December. This growth was supported by a 3% increase in customer traffic, marking December as the eighth consecutive month of traffic increases.
Target has also announced significant leadership changes, with Adrienne Costanzo set to become Chief Stores Officer and Prat Vemana as Chief Information and Product Officer, both effective February 2. These transitions are part of Target’s strategy to strengthen its leadership team. As the company navigates these developments, it continues to focus on evolving its strategies to drive growth and adapt to the changing external landscape.
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