Retail giant Target Corporation (NYSE:TGT) will release its fourth-quarter financial results on Tuesday, March 5. The pressure on consumer discretionary spending and inventory shrink could continue to pose challenges. However, Target’s growing digital capabilities, focus on enhancing efficiency, and favorable category and channel mix will likely support its top and bottom lines.
Ahead of the Q4 print, analysts from JPMorgan Chase, Oppenheimer, and Wells Fargo retained their Buy recommendation on TGT stock. Moreover, these analysts raised their price targets. Earlier, on January 18, Robert Drbul of Guggenheim said that Target Corporation is well-positioned for 2024, while the stock appears attractive on the valuation front. Drbul is bullish on TGT stock.
Against this backdrop, let’s delve into analysts’ Q4 expectations.
Target – Q4 Consensus Estimates
Wall Street expects Target to deliver revenue of $31.83 million, up about 4% year-over-year. The expected year-over-year increase is likely to be driven by its value pricing, focus on offering convenience, and the demand for same-day delivery services led by Drive-Up.
Coming to the bottom line, analysts expect Target to post earnings per share of $2.41 in Q4, up 27.5% year-over-year. The benefits from cost-saving initiatives, lower freight costs, favorable category and channel mix, and disciplined inventory management are expected to cushion the company’s earnings.
Website Traffic Shows Growth
TipRanks’ website traffic screener shows that traffic increased for Target sequentially and year-over-year in Q4.
According to the tool, the number of visits to target.com improved by 57.23% sequentially in Q4. Moreover, website traffic jumped 18.76% on a year-over-year basis.
Learn how Website Traffic can help you research your favorite stocks.
Is TGT a Good Buy Now?
Based on analysts’ consensus rating, TGT stock is a good buy ahead of earnings. Target stock has 14 Buy and three Hold recommendations for a Strong Buy consensus rating.
Target stock has gained about 10% year-to-date. Analysts’ average price target of $164.47 implies 5.91% upside potential from current levels.
Insights from Options Trading Activity
It’s worth noting that options traders are pricing in a +/- 7.24% move in TGT stock on earnings, lower than the previous quarter’s earnings-related move of 17.75%.
The anticipated move is determined by computing the at-the-money straddle of the options closest to the expiration after the earnings announcement.
Learn more about TipRanks’ Options tool here.
Bottom Line
Target Corporation might continue to grapple with macro headwinds. Meanwhile, inventory shrink remains a challenge. However, the company’s value pricing strategy, momentum in the same-day delivery services, and productivity savings will likely drive its fourth-quarter sales and earnings.