Fubotv earnings beat by $0.10, revenue topped estimates
On Wednesday, Telsey Advisory Group adjusted its perspective on Target Corporation (NYSE:TGT) shares, downgrading the rating from ’Outperform’ to ’Market Perform’. Concurrently, the firm reduced the retail giant’s price target from $130.00 to $110.00. The downgrade reflects several concerns, including a challenging macroeconomic landscape, inconsistent operational performance, and limited visibility on the effectiveness of the company’s initiatives. With the stock currently trading at $93.01, InvestingPro analysis suggests Target is undervalued, despite 15 analysts recently revising their earnings expectations downward.
The decision to downgrade Target’s stock rating was influenced by the retailer’s disappointing performance in the first quarter of 2025. Target reported an adjusted earnings per share (EPS) of $1.30, which fell short of Telsey’s estimate of $1.72 and the FactSet consensus of $1.61. Additionally, comparable sales for the quarter were down 3.8%, which was more severe than Telsey’s anticipated 1.5% decline and the FactSet consensus of a 2.0% drop. Despite these challenges, Target maintains a strong dividend yield of 4.57% and has increased its dividend for 54 consecutive years, according to InvestingPro data.
Target’s operating margin also contracted by 160 basis points to 3.7%, which is below Telsey’s projection of 4.5% and the FactSet consensus of 4.3%. This compression in operating margin further contributed to the firm’s reduced confidence in the retailer’s stock. However, InvestingPro data reveals the company maintains a healthy free cash flow yield of 11% and trades at an attractive P/E ratio of 10.5x, suggesting potential value for long-term investors. Get access to 8 more exclusive ProTips and comprehensive analysis in the Pro Research Report.
The downgrade and price target adjustment come in the wake of Target’s first-quarter performance, which has led to a recalibration of expectations for the company’s fiscal year 2025. Target’s guidance for the year has been lowered and expanded, indicating a broader range of potential outcomes and underscoring the uncertainties facing the company.
Telsey’s analysis underscores the potential risks associated with tariffs, which could have additional implications for Target’s operations. The firm’s commentary reflects a cautious stance on the retailer’s near-term prospects amidst a series of challenges.
In other recent news, Target Corporation reported a 3.8% decrease in comparable sales for the first quarter, with earnings per share at $1.30 and revenue totaling $23.8 billion, falling short of the anticipated $24.22 billion. Analysts have responded with various adjustments to Target’s stock price targets. TD Cowen reduced its price target to $105, maintaining a Hold rating, while Jefferies lowered its target to $120 but kept a Buy rating. Truist Securities increased its price target to $90, also maintaining a Hold rating. Evercore ISI upheld its In Line rating with a $100 price target, citing weaker than expected sales in discretionary categories like Apparel and Home. Despite challenges, Target’s digital sales and same-day delivery services showed growth, with digital sales increasing by 4.7% year-over-year. William Blair maintained an Outperform rating, highlighting Target’s effective handling of market challenges and stable inventory availability. The company’s gross margins and SG&A expenses reflected increased costs, impacting profitability, while analysts noted ongoing pressures from tariffs and competition.
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