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Earnings Outlook for Target

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Target (NYSE: TGT) announces its next round of earnings this Wednesday, November 18. Here is Benzinga's everything-that-matters guide for this Wednesday's Q3 earnings announcement.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Based on management's projections, Target analysts model for earnings of $1.56 per share on sales of $20.73 billion. In the same quarter last year, Target reported earnings per share of $1.36 on sales of $18.66 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to report earnings in line when it publishes results Wednesday, quarterly profit would be up 14.71%. Revenue would be have grown 11.06% from the same quarter last year. In comparison to analyst estimates in the past, here is how the company's reported EPS stacks up:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019
EPS Estimate 1.62 0.68 1.66 1.19
EPS Actual 3.38 0.59 1.69 1.36
Revenue Estimate 20.09 B 19.00 B 23.49 B 18.49 B
Revenue Actual 22.98 B 19.61 B 23.40 B 18.66 B

Stock Performance

Shares of Target were trading at $165.115 as of November 16. Over the last 52-week period, shares are up 27.17%. Given that these returns are generally positive, long-term shareholders should be satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Target is scheduled to hold the call at 08:00:00 ET and can be accessed here.

 

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