Here’s what Wall Street experts are saying about Target ahead of earnings

Target to report Q1 earnings before the market opens Wednesday

Target (TGT) is scheduled to report results of its first quarter before the market open on Wednesday, May 17, with a conference call scheduled for 8:00 am EDT. What to watch for:

GUIDANCE: In February, Target forecast fiscal 2023 adjusted earnings per share of $7.75-$8.75, with comparable sales ranging from a low-single digit decline to a low-single digit increase and operating income growing more than $1B. Analysts currently expect FY EPS of $8.46. Target stated at the time: "Over the next three years, the company expects its operating income margin rate will reach, and begin to move beyond, its pre-pandemic rate of 6%, and believes it could reach an operating income margin rate of 6% as early as fiscal 2024, depending on the speed of recovery for the economy and consumer demand."

For the first quarter, Target forecast adjusted EPS of $1.50-$1.90, with comparable sales down in the low-single digits to up low-single digits and an operating income margin rate of 4%-5%. Analysts expect Q1 EPS of $1.76.

BB&B CHAPTER 11 ‘POSITIVE’ FOR TARGET: Piper Sandler said in April that Bed Bath & Beyond’s (BBBY) Chapter 11 filing is positive for Target. Target is particularly well-positioned to gain share in home furnishings and baby/kids given its focus on these categories, the firm said, adding that similar to the Toys "R" Us bankruptcy in 2017, share gains will largely go to Target.

MARGIN RECOVERY OPPORTUNITY: Raymond James said Target’s long-term margin recovery opportunity is favorable and the firm thinks it can sustain its recent market share gains across multiple product categories, but lowered its near-term estimates to reflect recent trends across retail, including further slowing of discretionary demand and the likelihood of a higher promotional environment and consumables mix, the analyst told investors in a research note.

‘NEGATIVE’ Q1 COMPS: For Q1, Jefferies is modeling negative Q1 comps for Target, down 1% led by lower traffic and slightly positive ticket. The firm said margins remain pressured, but the Street is missing the upside potential in the second half  of the year.

SENTIMENT: Click here to check out recent Media Buzz Sentiment on Target as measured by TipRanks.

Keywords: earnings, quarterly earnings, earnings report, guidance, margins, comps, Q1