Tuesday's Earnings Outlook: Staying On Target (TGT)

Target TGT is set to release its second-quarter earnings tomorrow before the market open. Considered by many as an essential retailer during the initial phase of the COVID crisis, Target served as a popular destination for consumers needing to stock up on supplies.

CEO Brian Cornell said that during the pandemic, “We’re seeing a guest who’s shopping all of our categories, taking advantage of our one-stop solution”, making Target one of the few major retailers to thrive during COVID shutdowns. Investors should also note the success of Target's new curbside pickup option: same-day service deliveries were up 235% last year. Additionally, its growing portfolio of in-house brands has helped Target differentiate itself from competitors like Costco COST and Walmart WMT.

The price point of its in-house food, furniture, and clothing brands has been viewed as both affordable and fashionable; in the first quarter of 2021, Target’s owned brands grew by 36% and now has over 45 owned labels. Last quarter, Target reported EPS of $3.69 and revenue of $24.2 billion. For this quarter, Zacks estimates EPS of $3.48 with revenue of $24.97 billion. The stock is up almost 50% year-to-date, and analysts are primarily bullish on shares, with 22 out of 29 analysts rating Target either a buy or strong buy. Traders should look to Target’s earnings release tomorrow to see if the numbers confirm Target’s dominance in the retail space as the new go-to, one-stop-shop.


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