Target (TGT) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3-min read

Target (TGT) closed at $160.23 in the latest trading session, marking a +0.39% move from the prior day. This move outpaced the S&P 500's daily gain of 0.35%. At the same time, the Dow lost 0.1%, and the tech-heavy Nasdaq gained 0.37%.

Heading into today, shares of the retailer had gained 5% over the past month, outpacing the Retail-Wholesale sector's gain of 4.89% and the S&P 500's gain of 4.32% in that time.

TGT will be looking to display strength as it nears its next earnings release, which is expected to be November 18, 2020. On that day, TGT is projected to report earnings of $1.53 per share, which would represent year-over-year growth of 12.5%. Meanwhile, our latest consensus estimate is calling for revenue of $20.68 billion, up 10.77% from the prior-year quarter.

TGT's full-year Zacks Consensus Estimates are calling for earnings of $7.18 per share and revenue of $87.94 billion. These results would represent year-over-year changes of +12.36% and +12.58%, respectively.

Investors might also notice recent changes to analyst estimates for TGT. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.38% higher. TGT is holding a Zacks Rank of #1 (Strong Buy) right now.

Investors should also note TGT's current valuation metrics, including its Forward P/E ratio of 22.23. For comparison, its industry has an average Forward P/E of 22.23, which means TGT is trading at a no noticeable deviation to the group.

It is also worth noting that TGT currently has a PEG ratio of 3.08. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. TGT's industry had an average PEG ratio of 3.08 as of yesterday's close.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 125, putting it in the top 50% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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