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Stock Analysis & Ideas

Target Reports Q1 Earnings Tomorrow: What to Expect

Target (TGT), a lead player in the consumer goods sector, will release its Q1-2022 earnings results tomorrow.

Target has effectively restructured its business in the face of fierce competition and rising inflation, placing a strong emphasis on its digital channel and exclusive items.

In its fourth-quarter results, Target’s revenue and earnings witnessed impressive growth. While revenue increased by 9.4% year-over-year to $31 billion, profitability increased by 19.2% to $3.19 per share.

Let’s have a look at how the company is projected to perform in the upcoming quarter.

Target’s Website Visit Statistics

Given Target’s recent emphasis on its digital channel, a peek at the company’s monthly visitor data would be fascinating. So, to understand more about Target’s performance ahead of Q1, we used TipRanks’ new website visit tracking tool.

Using the tool, we discovered a 24% decline in total global visits to the target.com website from the preceding quarter (Q4 2021).

Also, on a year-over-year basis, monthly visits to the Target website fell 13.6% in the first quarter.

Expectations for Q1

According to analysts, Target is projected to report adjusted earnings of $3.07 per share in the first quarter. This represents a year-over-year decline of 17%.

Target has exceeded earnings projections for the past eight quarters, as indicated in the graph above.

In addition, despite a challenging economic environment characterized by cost inflation, labor challenges, and supply chain bottlenecks, the company anticipates continued growth in the current fiscal year.

Wall Street’s Take

Deutsche Bank analyst Krisztina Katai is upbeat about Target’s core fundamentals. However, Katai believes that weak consumer spending could impact results.

As a result, the three-star analyst maintained a Buy rating on the stock and decreased the price target to $294 from $353 per share. This implies about 38.4% upside potential from current levels.

On TipRanks, Target stock commands a Strong Buy consensus rating based on 15 Buys and four Holds. The average Target price target of $278.50 implies almost 31.2% upside potential from the current levels.

Bottom Line

Despite various near-term hurdles, Target’s strategic objectives are propelling the company forward. The stock has gained around 2% during the last three months. It’ll be interesting to see if the company can continue to win despite growing inflation.

Learn more about the Website Traffic tool in this video by YouTube sensation Tom Nash. 

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