Following Target's (TGT) earnings release before the open Wednesday, analysts at Citi said the company's sales were no worse than feared.
The retailer reported Q3 earnings of $2.10 per share, $0.63 better than the analyst estimate of $1.47. Revenue for the quarter came in at $25.4 billion versus the consensus estimate of $25.29 billion.
Target shares surged following the report, currently up more than 17% at $130 per share.
"3Q EPS significantly beat guidance consensus, driven by better GM, while sales were no worse than feared (comps -4.9%)," the analysts wrote, who have a Neutral rating and a $117 price target on the stock. "4Q guidance brackets consensus and was approximately the same as the implied 4Q guidance they gave in 3Q."
The analysts added that the underlying sales trend of -MSD remains a concern, particularly as they "think about what it might imply for margins next year" if the trends continue against an inflated sales based built up over the past several years. Citi also noted that GM performance in 3Q was better than expected.