Shares of Target Corp. (NYSE: TGT) were on an upswing in pre-market trading on Tuesday after the retailer reported adjusted earnings of $1.89 per share in Q4, a decline of 40.6% year-over-year but still beating analysts’ consensus estimate of $1.40 per share.
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Sales increased by 1.3% year-over-year to $31.4 billion and beat analysts’ expectations of $30.7 billion. Comparable sales went up by 0.7% in the fourth quarter “driven entirely by an increase in guest traffic.’
Looking forward, management now expects comparable sales in the first quarter to vary widely from a “low-single digit decline to a low-single digit increase” Adjusted EPS in Q1 is expected to range from $1.50 to $1.90 versus consensus estimates of $2.16.
For FY23, Target has forecasted comparable sales “in a wide range from a low-single digit decline to a low-single digit increase.” Adjusted EPS is projected to range from $7.75 to $8.75.
Target added that over the next three years, the company expects its operating income margin rate is likely to reach the pre-pandemic rate of 6% and ‘believes it could reach an operating income margin rate of 6 percent as early as fiscal 2024, depending on the speed of recovery for the economy and consumer demand.”
Overall analysts are cautiously optimistic about TGT stock with a Moderate Buy consensus rating based on 11 Buys and ten Holds.
