Target Posts Blowout First Quarter; Shares Pop

Target Corporation (TGT) soared more than 6% on May 19 after the retailer posted blockbuster Q1 results. The company’s adjusted earnings grew substantially by 525% to $3.69 per share on a year-over-year basis and came in above the consensus estimate of $2.25 per share.

Total revenues were $24.2 billion in Q1 which climbed 23% from the year-ago period. Analysts were expecting revenues of $21.81 billion.

Comparable sales grew 22.9% in Q1, indicating market share gains across varied categories. Markedly, comparable store sales grew 18% and comparable digital sales jumped 50%.

Target Corporation CEO Brian Cornell said, “Given the trust we’ve built with our guests quarter after quarter and our commitment to adjusting along with them to the ongoing shifts in the macro environment, we’re confident in continued comp growth in the second quarter and through the remainder of the year, as well as a healthy full-year operating margin rate.” (See Target Corporation  stock analysis on TipRanks)

Following the Q1 earnings release, Stifel analyst Mark Astrachan maintained the stock’s price target of $230 (5% upside potential) and a Buy rating.

Astrachan said, “While consistent with F1Q upside from large retail peers, we think above- consensus F2H guidance should drive share price outperformance, particularly given the magnitude of anticipated favorable revisions consensus comp and EPS. Comp growth above 20% for the fourth consecutive quarter indicates share gains across many categories are continuing, in part reflecting strong digital growth led by same-day services.”

Consensus among analysts is a Strong Buy based on 17 Buys and 4 Holds. The average analyst price target stands at $236.35 and implies upside potential of 7.9% to current levels. Shares have gained 83.1% over the past year.

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Target Corporation, with 9.2% of investors increasing their exposure to TGT stock over the past 30 days.

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