Target Corporation ($TGT) Earnings (Q2 FY23)

 Target Corporation ($TGT) Earnings and Opinion:


Target is a company in the Consumer Defensive sector and operates in the Discount Stores industry. The company operates as a merchandise retailer in the United States. Target was incorporated in 1902 and is currently headquartered in Minneapolis, Minnesota. The company made its debut on the stock market in 1967.

Target Earnings Results:

  • Revenues of $25.65B missing expectations of $25.84B
  • Gross Profit of $5.51B missing expectations of $6.25B
  • Operating Income of $321M missing expectations of $535M
  • Adjusted EPS of $0.39 missing expectations of $0.72
Opinion:
Target took a huge hit after reporting earnings before the market opened yesterday. The company saw a miss on expectations in all of the respected metrics reported. The misses weren't even really close either, the differenced were significant which caused a shift in the retail sector. Most retail stocks took a hit yesterday and it could be blamed on the bad earnings from Target. Their profit saw a sink as they unloaded unwanted inventory. They put a lot of items on discount and canceled orders in an effort to get rid of some of the good that they didn't want. Target seems to be in a bit of a struggle especially in a tough macro environment right now. As far as the stock valuation. Target has a P/E ratio of 19.92 which is lower than the industry average of close to 23. P/S sits at a value of 0.76 which is a fair value. The annual growth was minimal, but it is better than most competitors. I love the return on equity with it being high, however, the current ratio needs to be a little higher with it sitting at 0.87 right now. Debt outweighs cash, but that shouldn't be too much of a concern for investors. For my opinion, Target is a good position for a foundational holding. The track record of success will not fail you of generating some sort of return. Now may be the time to buy too with it being slightly undervalued currently. I definitely don't think this is a stock that will outperform the market, but it has upside and more guaranteed returns than some of your high risk, high reward stocks. Target needs to figure out things with unwanted inventory, but I think this could be a golden opportunity for retail investors.


*Information from Yahoo Finance, Zacks, CMLVIZ, Consensus Gurus

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