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Target (TGT - Free Report) is the retailer built for the largest consuming generation, Millennials, with unmatched omnichannel solutions. Target is likely the most digitally adapted brick-and-mortar retailer, and it showed in its quarterly report last week. The enterprise released another record EPS driven by its ability to capture more foot traffic as economies reopen and leverage its same-day digital services (Order Pickup, Drive Up, and Shipt), which were up more than 90% year-over-year.
TGT has hit a fresh all-time high every day since its March quarter earnings last Wednesday, having surged over 10% in the past 4 days of trading, following its lofty quarterly expectations being exceeded. Target CEO Brian Cornell came on CNBC last week and said, "we are seeing a much more optimistic consumer, who is excited about getting back to the life that they haven't lived for the last year." Target appears to be the place that is bringing society back to life.
Target is a retail machine that has seems to impress endlessly. Just when you think the company couldn't do any better, it comes out with results and forward guidance that can't be ignored. Analysts have sizably raised their EPS estimates for not only 2021 but the next few years, propelling TGT into a Zacks Rank #1 (Strong Buy).
The Digital Effect
The global pandemic pulled forward 10 years of digital demand in 10 months. Target was a brick-and-mortar retailer that was perfectly positioned for the economic lockdowns, which forced consumers & businesses to rapidly adapt their consumption patterns. The enterprise's transformation from a traditional brick-and-mortar retailer to an omnichannel powerhouse allowed the company to swiftly take market share across retail categories.
The post-pandemic new normal in which we live will continue to be driven by the ease and convenience of digital technology. Target customers have been leveraging its omnichannel solutions throughout the pandemic and will continue throughout the roaring 20s, with society now conditioned to do so.
Target's $550 million acquisition of Shipt, its same-day delivery service, at the end of 2017, may have been the savviest purchase this company has ever made. This subscription-based delivery service can provide you with home deliveries of anything from groceries to a new TV in as little as an hour. According to UBS analysis done at the beginning of 2021, Shipt could be worth as much as $14 billion, or more than 25 times what Target originally paid for only 3 years earlier.
Financials
Target's last 4 quarters have been unbelievable, illustrating accelerating profitable growth that I never thought this stable retailer would have been able to obtain. The company demonstrated over 20% year-over-year expansion in the past 4 quarters, propelling its bottom-line to levels that many never thought were attainable (at least not anytime soon). Target's consistent margin expansion exemplifies its operational excellence.
The enterprise's $7.8 billion in cash & equivalents combined with consistently growing cash flows gives it enormous financial flexibility for internal investment or savvy external acquisitions. The business's proven ability to put its money to good use gets me excited about what the
Short-Term Risk
TGT is teetering at overbought levels, following its 4-day rally, which you can see represented in the TradingView chart below.
This overbought RSI level could catalyze a near-term pullback in the share price, but if you can weather short-term volatility, I don't think buying TGT at its all-time highs here is crazy. In fact, following that outstanding March quarter report, TGT is actually cheaper from a P/E standpoint today than it's been all year.
Final Thoughts
The market share gains that Target was able to obtain over the past 15 months of lockdowns will continue to be a tailwind for the business as economic reopening's increase foot traffic. Analysts have been raising their 12–18-month price targets, with the most optimistic target sitting at $300 per share (33% upside from where it's trading today). 15 out of 20 analysts are calling TGT a buy today, with 0 sell ratings.
A growth stock with a 1.2% dividend is hard to come by these days. TGT has rallied 150% from its pandemic lows, but it may still have legs to run. Consider adding Target to your portfolio as a long-term investment for the new normal.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Bull Of The Day: Target (TGT)
Target (TGT - Free Report) is the retailer built for the largest consuming generation, Millennials, with unmatched omnichannel solutions. Target is likely the most digitally adapted brick-and-mortar retailer, and it showed in its quarterly report last week. The enterprise released another record EPS driven by its ability to capture more foot traffic as economies reopen and leverage its same-day digital services (Order Pickup, Drive Up, and Shipt), which were up more than 90% year-over-year.
TGT has hit a fresh all-time high every day since its March quarter earnings last Wednesday, having surged over 10% in the past 4 days of trading, following its lofty quarterly expectations being exceeded. Target CEO Brian Cornell came on CNBC last week and said, "we are seeing a much more optimistic consumer, who is excited about getting back to the life that they haven't lived for the last year." Target appears to be the place that is bringing society back to life.
Target is a retail machine that has seems to impress endlessly. Just when you think the company couldn't do any better, it comes out with results and forward guidance that can't be ignored. Analysts have sizably raised their EPS estimates for not only 2021 but the next few years, propelling TGT into a Zacks Rank #1 (Strong Buy).
The Digital Effect
The global pandemic pulled forward 10 years of digital demand in 10 months. Target was a brick-and-mortar retailer that was perfectly positioned for the economic lockdowns, which forced consumers & businesses to rapidly adapt their consumption patterns. The enterprise's transformation from a traditional brick-and-mortar retailer to an omnichannel powerhouse allowed the company to swiftly take market share across retail categories.
The post-pandemic new normal in which we live will continue to be driven by the ease and convenience of digital technology. Target customers have been leveraging its omnichannel solutions throughout the pandemic and will continue throughout the roaring 20s, with society now conditioned to do so.
Target's $550 million acquisition of Shipt, its same-day delivery service, at the end of 2017, may have been the savviest purchase this company has ever made. This subscription-based delivery service can provide you with home deliveries of anything from groceries to a new TV in as little as an hour. According to UBS analysis done at the beginning of 2021, Shipt could be worth as much as $14 billion, or more than 25 times what Target originally paid for only 3 years earlier.
Financials
Target's last 4 quarters have been unbelievable, illustrating accelerating profitable growth that I never thought this stable retailer would have been able to obtain. The company demonstrated over 20% year-over-year expansion in the past 4 quarters, propelling its bottom-line to levels that many never thought were attainable (at least not anytime soon). Target's consistent margin expansion exemplifies its operational excellence.
The enterprise's $7.8 billion in cash & equivalents combined with consistently growing cash flows gives it enormous financial flexibility for internal investment or savvy external acquisitions. The business's proven ability to put its money to good use gets me excited about what the
Short-Term Risk
TGT is teetering at overbought levels, following its 4-day rally, which you can see represented in the TradingView chart below.
This overbought RSI level could catalyze a near-term pullback in the share price, but if you can weather short-term volatility, I don't think buying TGT at its all-time highs here is crazy. In fact, following that outstanding March quarter report, TGT is actually cheaper from a P/E standpoint today than it's been all year.
Final Thoughts
The market share gains that Target was able to obtain over the past 15 months of lockdowns will continue to be a tailwind for the business as economic reopening's increase foot traffic. Analysts have been raising their 12–18-month price targets, with the most optimistic target sitting at $300 per share (33% upside from where it's trading today). 15 out of 20 analysts are calling TGT a buy today, with 0 sell ratings.
A growth stock with a 1.2% dividend is hard to come by these days. TGT has rallied 150% from its pandemic lows, but it may still have legs to run. Consider adding Target to your portfolio as a long-term investment for the new normal.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How to Profit from Trillions on Spending for Infrastructure >>