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How is Target (TGT) Poised Ahead of Q2 Earnings Release?
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Target Corporation (TGT - Free Report) is likely to register an increase in the top line when it reports second-quarter fiscal 2020 results on Aug 19, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $19,907 million, indicating growth of 8.1% from the prior-year reported figure.
However, the bottom line of this general merchandise retailer is expected to decline year over year. Although the Zacks Consensus Estimate for earnings for the quarter under review has increased by 9 cents to $1.56 over the past seven days, the figure suggests a decline of 14.3% from the year-ago period.
Notably, the company has a trailing four-quarter earnings surprise of 14.4%, on average. In the last reported quarter, this Minneapolis, MN-based company surpassed the Zacks Consensus Estimate by a significant margin.
Key Factors to Note
Target is likely to have benefited from coronavirus-led stockpiling and shift to food-at-home trend as maintaining social distancing have become the “new normal.” Industry experts believe that the company's major product categories are likely to have benefited from consumers’ pent-up demand during the quarter courtesy of the stimulus checks and enhanced unemployment benefits. Notably, higher sales in Essentials and Food & Beverage categories with solid contribution from digital channel might have contributed to the company’s top-line performance.
The company’s focus on enhancing omni-channel capacities, remodeling stores and expanding same-day delivery options is commendable. To make consumers’ lives easier amid the pandemic and provide them with reasons to shop more at Target, the company added 750 fresh and frozen grocery items to its in-store order pickup and curbside drive up online services. The services were available in more than 400 outlets by the end of June.
While the aforementioned factors raise optimism, we cannot overlook margins. Certainly, investments in pay and benefits for frontline team members, shift in channel mix toward digital fulfilment and any decline in the sales of higher-margin discretionary items are likely to have weighed on margins. Cumulatively, these are likely to get reflected in the second-quarter bottom line.
Target Corporation Price, Consensus and EPS Surprise
Our proven model predicts an earnings beat for Target this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Target has a Zacks Rank #3 and an Earnings ESP of +13.85%.
3 More Stocks With Favorable Combination
Here are three other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
Big Lots (BIG - Free Report) has an Earnings ESP of +5.04% and a Zacks Rank #3.
Lowe's Companies (LOW - Free Report) has an Earnings ESP of +4.41% and a Zacks Rank #3.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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How is Target (TGT) Poised Ahead of Q2 Earnings Release?
Target Corporation (TGT - Free Report) is likely to register an increase in the top line when it reports second-quarter fiscal 2020 results on Aug 19, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $19,907 million, indicating growth of 8.1% from the prior-year reported figure.
However, the bottom line of this general merchandise retailer is expected to decline year over year. Although the Zacks Consensus Estimate for earnings for the quarter under review has increased by 9 cents to $1.56 over the past seven days, the figure suggests a decline of 14.3% from the year-ago period.
Notably, the company has a trailing four-quarter earnings surprise of 14.4%, on average. In the last reported quarter, this Minneapolis, MN-based company surpassed the Zacks Consensus Estimate by a significant margin.
Key Factors to Note
Target is likely to have benefited from coronavirus-led stockpiling and shift to food-at-home trend as maintaining social distancing have become the “new normal.” Industry experts believe that the company's major product categories are likely to have benefited from consumers’ pent-up demand during the quarter courtesy of the stimulus checks and enhanced unemployment benefits. Notably, higher sales in Essentials and Food & Beverage categories with solid contribution from digital channel might have contributed to the company’s top-line performance.
The company’s focus on enhancing omni-channel capacities, remodeling stores and expanding same-day delivery options is commendable. To make consumers’ lives easier amid the pandemic and provide them with reasons to shop more at Target, the company added 750 fresh and frozen grocery items to its in-store order pickup and curbside drive up online services. The services were available in more than 400 outlets by the end of June.
While the aforementioned factors raise optimism, we cannot overlook margins. Certainly, investments in pay and benefits for frontline team members, shift in channel mix toward digital fulfilment and any decline in the sales of higher-margin discretionary items are likely to have weighed on margins. Cumulatively, these are likely to get reflected in the second-quarter bottom line.
Target Corporation Price, Consensus and EPS Surprise
Target Corporation price-consensus-eps-surprise-chart | Target Corporation Quote
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Target this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Target has a Zacks Rank #3 and an Earnings ESP of +13.85%.
3 More Stocks With Favorable Combination
Here are three other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
Dollar General (DG - Free Report) has an Earnings ESP of +6.88% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Big Lots (BIG - Free Report) has an Earnings ESP of +5.04% and a Zacks Rank #3.
Lowe's Companies (LOW - Free Report) has an Earnings ESP of +4.41% and a Zacks Rank #3.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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