TARGET TGT
Fundamental and Technical Analysis before Earnings Release
Target Corporation (NYSE: TGT) is scheduled to release its fourth quarter and full-year earnings for Fiscal 2024 on Tuesday, March 4, 2025, before the market opens.
Target Corporation is a prominent American retail company headquartered in Minneapolis, Minnesota. It operates a chain of discount department stores and hypermarkets across the United States. As of 2023, Target is the seventh-largest retailer in the U.S. and a component of the S&P 500 Index. The company's roots date back to 1902 when George Dayton founded the Dayton's Dry Goods Company. The first Target store was opened in 1962 by John Geisse.
Key Information
Headquarters: Minneapolis, Minnesota, United States
Founded: 1902
Employees: 1over 6,000
Industry: retail industry, specifically in the discount stores sector
Stock Symbol: TGT (NYSE)
Store Network: Target operates nearly 2,000 stores across the U.S..
Product Range: Target stores offer a wide range of products, including clothing, household goods, electronics, toys, and groceries.
Competitors: Its main competitors are Walmart and Amazon.
Recent Developments
Holiday Sales Performance: Target reported a 2.8% increase in total sales for the November and December 2024 holiday period, with comparable sales growing by 2% and digital sales increasing by nearly 9% compared to the previous year. The company also saw record-high sales during both Black Friday and Cyber Monday promotional periods.
Financial Reporting Changes: On March 4, 2025, Target will report its fourth quarter and full-year earnings for 2024, introducing a new financial statement format. This includes changes in how gross margin and SG&A expenses are calculated and reported.
Dividend Declaration: In January 2025, Target's board of directors declared a quarterly dividend of $1.12 per common share.
DEI Initiative Rollback: In late January 2025, Target announced a significant rollback of its diversity, equity, and inclusion (DEI) programs. This includes discontinuing three-year DEI objectives, ceasing reporting to external diversity-focused organizations, and ending a program aimed at increasing products from minority-owned businesses.
Leadership Changes: Target announced executive leader retirements and named successors across its stores, technology, and digital teams in January 2025, positioning the company to meet its long-term goals.
Investment Plans: For 2025, Target plans to invest $4-5 billion in store network expansion, logistics, and digitalization, adopting a more balanced approach to these investments.
These developments indicate Target's efforts to adapt to changing market conditions, adjust its strategic focus, and position itself for future growth in the competitive retail landscape.
Fundamental Analysis of TGT
Revenue Growth
Target's revenue growth has been relatively modest in recent years:
For the fiscal year ending February 3, 2024, Target reported annual revenue of $107.41 billion, representing a decrease of 1.57% compared to the previous year.
In the quarter ending November 2, 2024, Target's revenue was $25.67 billion, showing a 1.06% growth compared to the same quarter in the previous year.
For the last twelve months (TTM) as of the latest reported quarter, Target's revenue reached $107.57 billion, indicating a year-over-year growth of 0.64%.
During the 2024 holiday season (November and December), Target's total sales increased by 2.8%, with comparable sales growing by 2% and digital sales increasing by nearly 9% compared to the previous year.
Looking ahead, Target expects growth of approximately 1.5% in its fourth-quarter comparable sales for the fiscal year 2024.
Profitability
Target Corporation reported its third quarter 2024 financial results, showing mixed performance across various metrics:
Revenue: $25.7 billion, up 1.1% year-over-year
Comparable sales: Increased 0.3%
Net income: $854 million, down 12% year-over-year
Earnings per share (EPS): $1.85, down 11.9% from $2.10 in Q3 2023
Operating income margin: 4.6%, compared to 5.2% in Q3 2023
Gross margin rate: 27.2%, down from 27.4% in Q3 2023
Guest traffic: Grew 2.4% over the prior year
Future outlook
Target Corporation's future outlook for 2025 and beyond presents a mix of challenges and opportunities:
Revenue Growth: Fiscal full-year 2025 revenues are expected to grow 4.8% to 5.1% year-over-year, reaching $673.5 billion to $675.4 billion.
Comparable Sales: For Q4 2024, Target expects approximately flat comparable sales.
EPS Outlook: The full-year EPS outlook has been adjusted to a range of $8.30 to $8.90, down from the previous range of $9.00 to $9.70.
Strategic Initiatives
Digital Growth: Target is investing heavily in its website, same-day delivery, and store remodels to enhance customer experience.
Private Label Expansion: The company is focusing on growth in private-label brands such as Good & Gather and Cat & Jack.
Competitive Positioning: Target is expanding its food and essentials offerings to compete more effectively with Walmart and Costco.
Technology Integration: The company is increasing its use of automation and AI-based analytics to optimize supply chains.
Market Challenges
Discretionary Spending: Target faces challenges due to its higher exposure to discretionary categories compared to competitors like Walmart.
Economic Factors: The company's performance may be impacted by ongoing inflation and elevated interest rates affecting consumer spending.
Technical Analysis of TGT
Based on the current technical analysis of Target Corporation (TGT) stock as of March 3, 2025, the overall sentiment is bearish.
Daily Chart
Here's a breakdown of key technical indicators:
Moving Averages
8-day EMA: $125.94
20-day EMA: $129.69
Short-term moving averages indicate a sell signal, with the stock price below both the 8-day and 20-day SMAs, it generally indicates a short-term downtrend or bearish sentiment for the stock.
The 50-day EMA at $133.11 is above the current price, it generally indicates a bearish trend in the market.
100-day SMA: $137.46, it generally indicates a bearish trend in the medium term.
200-day SMA: $141.66, it generally indicates a bearish trend in the long term.
Oscillators and Momentum
The Relative Strength Index (RSI) (14,70,30)
Daily: 38.08, indicates that the asset is approaching oversold territory, but has not yet reached the traditional oversold threshold. It is generally considered bearish, but not extremely so.
Weekly: 37.02, indicates that the asset is approaching oversold territory, but hasn't quite reached it yet.
The Moving Average Convergence Divergence (MACD) (12,6,9)
Daily: -3.131, indicates a bearish sentiment in the short-term.
Weekly: -5.48, indicates a strong bearish trend in the medium to long term.
The Commodity Channel Index (CCI) (14,-100,100)
Daily: -114.19, indicates that the asset is currently in oversold territory. This value, being below -100, suggests strong bearish momentum and a potential downtrend in the asset's price
Weekly: -157.15, A weekly CCI reading of -157.15 indicates an extremely oversold condition in the asset's price. This value, being significantly below the -100 threshold, suggests a strong bearish momentum and a potential downtrend that has persisted for several weeks.
Price Action and Volatility
Bollinger Bands (Daily) : 129.69; 121.12; 138.26
Bollinger Bands (Weekly): 137.33; 117.95; 156.70)
Price position: The stock price is closer to the lower Bollinger Band than the upper band, suggesting downward pressure, both daily and weekly.
Percent B (%b): The Percent B value relatively low and indicates that the price is near the lower Bollinger Band, further confirming bearish sentiment.
Bandwidth:
Daily : 8.57, suggests that the market is experiencing average to slightly above-average volatility.
Weekly: 19.37, suggests that the market is experiencing above-average volatility. This means that price movements are more expansive than usual on a weekly timeframe.