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Target (TGT) Stock Drops Despite Market Gains: Important Facts to Note

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The latest trading session saw Target (TGT - Free Report) ending at $141.06, denoting a -1.01% adjustment from its last day's close. This change lagged the S&P 500's 0.92% gain on the day. Meanwhile, the Dow experienced a rise of 0.31%, and the technology-dominated Nasdaq saw an increase of 2.03%.

The retailer's stock has climbed by 5.52% in the past month, exceeding the Retail-Wholesale sector's gain of 4.85% and the S&P 500's gain of 0.81%.

The investment community will be closely monitoring the performance of Target in its forthcoming earnings report. The company is expected to report EPS of $2.23, down 25.17% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $30.7 billion, down 3.82% from the prior-year quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $8.69 per share and revenue of $106.35 billion. These totals would mark changes of -2.8% and -0.99%, respectively, from last year.

Investors should also take note of any recent adjustments to analyst estimates for Target. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.94% higher. Target presently features a Zacks Rank of #2 (Buy).

From a valuation perspective, Target is currently exchanging hands at a Forward P/E ratio of 16.41. This valuation marks a discount compared to its industry's average Forward P/E of 20.62.

Also, we should mention that TGT has a PEG ratio of 2.32. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As the market closed yesterday, the Retail - Discount Stores industry was having an average PEG ratio of 2.39.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 37, which puts it in the top 15% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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