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Telsey Analyst: Target's Earnings Shows It's 'Squeezed' Between Two Major Rivals

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Telsey Analyst: Target's Earnings Shows It's 'Squeezed' Between Two Major Rivals
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Target Corporation (NYSE: TGT) reported its third quarter results, which for the most part exceeded Wall Street's expectations but was accompanied with a concerning outlook for the fourth quarter.

The Expert

Telsey Advisory Group's Joseph Feldman says to remain on the sidelines.

The Thesis

Target's third quarter report demonstrates that the retailer is being "squeezed" between its two biggest rivals, Amazon.com, Inc. (NASDAQ: AMZN) and Wal-Mart Stores Inc (NYSE: WMT), both of which are doing a "terrific job" in keeping their respective customers happy, Feldman said on CNBC's "Squawk Box" segment. Target is trying to keep up with the competition by focusing on new store formats and digital to various degrees of success.

But Target may be at a disadvantage with its newer small-store formats, especially in suburbs, as many consumers want the big box store experience, Feldman said. To the company's credit, it's also leveraging stores to fulfill online orders and give consumers the opportunity to pick online purchases and the mobile app is also "one of the best" among the entire retail space.

In fact, the company's strong performance in the digital space was responsible for driving overall same-store sales growth, which rose 0.9 percent and digital was responsible for 0.8 percent.

Price Action

Shares of Target were trading lower by more than 5 percent at $56.75 ahead of Wednesday's opening bell.

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Latest Ratings for TGT

DateFirmActionFromTo
Jun 2018SusquehannaTerminatesPositivePositive
Feb 2018Credit SuisseInitiates Coverage OnOutperform
Feb 2018BairdUpgradesNeutralOutperform

View More Analyst Ratings for TGT
View the Latest Analyst Ratings

Posted-In: CNBC Joseph FeldmanAnalyst Color Earnings News Guidance Analyst Ratings Media Best of Benzinga

 

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