Market Overview

Target Impresses Investors With Strong Q2 Report

Target (NYSE: TGT) released its quarterly earnings Wednesday morning, and the numbers are looking good. The company also started a program that gives shoppers a 5 percent discount when they use Target-branded credit and debit cards.

It posted a June comp of 2.1 percent, lower than the consensus forecast of 2.8 percent but still an encouraging number. The comp increases have been credited to growth in average transaction size. Management says that the July comp numbers will increase in the low to mid single digit range, assuring steady growth.

Target reported a Q2 EPS of $1.12 vs. $1.01 est. while they announced a FY EPS guide of $4.20-4.40, had seen $4.10-$4.30 Est

According to the report revenue increased 3.5 percent to $16.78 billion in the second quarter, above the $16.75 billion expected by investors.

On Tuesday, Deutsche Bank maintained Target with a Buy rating and raised its price target from $65 to $68. Citigroup reiterated its $68 price target as well and maintained a Neutral rating. In both cases, the banks seem to be wary of putting money into Target until its shares show more growth.

Following its Q2 announcement, Target said it is on track to open 125 Stores in Canada in 2013, demonstrating a significant growth forecast.

Target has also teamed up with Walmart (NYSE: WMT), 7-11, Best Buy (NYSE: BBY), and others to offer a mobile payments network. Mobile Wallet will be combined with targeted offers and promotions, all of which will be available through smartphones. This play is expected to create a major competitor for Google's (NASDAQ: GOOG) Wallet offering and should help with Target's growth into future.

Target traded up better than 2 percent to around $65 Wednesday.

Posted-In: Citigroup Deutsche Bank Mobile WalletEarnings News Guidance Events Best of Benzinga

 

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