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The Zacks Consensus Estimate for first-quarter revenues stands at $24.45 billion, indicating a marginal decline of 0.3% from the same period last year. Meanwhile, earnings are projected at $1.68 per share, suggesting a drop of 17.2% from the year-ago quarter. The consensus estimate for earnings has been revised downward by six cents over the past seven days.
Image Source: Zacks Investment Research
Target has a trailing four-quarter average earnings surprise of 1.5%. In the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate by a margin of 7.1%. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Target Corporation Price, Consensus and EPS Surprise
As investors prepare for TGT’s first-quarter announcement, the question of earnings beat or miss looms. Our proven model does not conclusively predict an earnings beat for Target this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.
Target has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of -9.91%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Target issued a cautious outlook for the first quarter of fiscal 2025 during its last quarter earnings call. The Minneapolis, MN-based retailer guided significant year-over-year profit pressure in the first quarter compared to the rest of the year due to ongoing consumer uncertainty, a slight decline in net sales for February, tariff concerns and the expected timing of certain expenses throughout the fiscal year.
While the company experienced record Valentine’s Day sales in February, overall performance for the month was subdued. Unseasonably cold weather across the United States impacted apparel sales, and declining consumer confidence resulted in weaker demand for discretionary categories.
This remains a core vulnerability for Target, which derives a significant portion of its revenues from discretionary segments such as home goods, hard lines and apparel. These categories are inherently volatile and susceptible to external shocks. Compounding the uncertainty are persistent risks tied to U.S.-China tariff dynamics. We expect comparable sales to decrease 1%, with the average transaction amount anticipated to drop 1.6%.
Nonetheless, Target’s focus on innovation, digital growth and store enhancements is likely to have contributed to first-quarter performance. By combining a strong physical store presence with expanding e-commerce capabilities, the company improved convenience and flexibility for customers. Initiatives like same-day services and curbside pickup, along with a growing Target Circle membership, are likely to have driven increased traffic and engagement. The success of Target’s private label brands and its balanced product mix are other catalysts. Moreover, growth in platforms like Target Plus and Roundel is likely to have contributed to higher-margin revenue streams, supporting overall business momentum in the first quarter.
Target Stock Price Performance
Target’s stock price has advanced 4.3% in the past month compared with the Zacks Retail–Discount Stores industry’s rise of 1.5%. The broader Zacks Retail-Wholesale sector has jumped 12.3%, while the S&P 500 Index has climbed 11.4% during the same period.
Target has outperformed Costco Wholesale Corporation (COST - Free Report) and Dollar General Corporation (DG - Free Report) but underperformed Dollar Tree, Inc. (DLTR - Free Report) in the past month. Shares of Costco and Dollar Tree jumped 1.6% and 9.4%, respectively, while Dollar General declined 0.1%.
Image Source: Zacks Investment Research
Does Target Present a Strong Case for Value Investing?
Target is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 10.67X, which positions it at a discount compared to the industry’s average of 32.49X. The stock is also trading below its median P/E level of 14.65, observed over the past year. Target is trading at a discount to Dollar General (with a forward 12-month P/E ratio of 16.24), Dollar Tree (16.03) and Costco (52.53).
Image Source: Zacks Investment Research
Target Stock Analysis: Best Move for Investors
Target is navigating a tough retail environment with ongoing challenges in discretionary spending, margin pressure and soft guidance weighing on investor sentiment. Although the company is investing in digital growth and operational improvements, the benefits may take time to materialize. For now, the stock lacks strong near-term catalysts. New investors may want to wait for clearer signs of recovery, while existing holders should consider reducing their position if short-term performance is a concern.
Final Thoughts on Target’s Q1 Outcome
Given the mix of near-term headwinds and long-term strategic strengths, Target stock may warrant a cautious approach ahead of its Q1 earnings release. While external pressures, such as weak discretionary demand and macroeconomic uncertainty, could weigh on results, the company’s ongoing investments in digital capabilities, private labels and customer experience offer a foundation for future recovery. Investors may want to wait for clearer signs of stabilization in sales trends and margin performance before making a decisive move.
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Buy, Hold or Sell Target Stock? Key Tips Ahead of Q1 Earnings
The countdown is on for Target Corporation’s (TGT - Free Report) first-quarter fiscal 2025 earnings release, set for May 21, before the market opens.
The Zacks Consensus Estimate for first-quarter revenues stands at $24.45 billion, indicating a marginal decline of 0.3% from the same period last year. Meanwhile, earnings are projected at $1.68 per share, suggesting a drop of 17.2% from the year-ago quarter. The consensus estimate for earnings has been revised downward by six cents over the past seven days.
Image Source: Zacks Investment Research
Target has a trailing four-quarter average earnings surprise of 1.5%. In the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate by a margin of 7.1%. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Target Corporation Price, Consensus and EPS Surprise
Target Corporation price-consensus-eps-surprise-chart | Target Corporation Quote
What the Zacks Model Predicts About TGT
As investors prepare for TGT’s first-quarter announcement, the question of earnings beat or miss looms. Our proven model does not conclusively predict an earnings beat for Target this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.
Target has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of -9.91%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
What’s Shaping Target’s Q1 Earnings?
Target issued a cautious outlook for the first quarter of fiscal 2025 during its last quarter earnings call. The Minneapolis, MN-based retailer guided significant year-over-year profit pressure in the first quarter compared to the rest of the year due to ongoing consumer uncertainty, a slight decline in net sales for February, tariff concerns and the expected timing of certain expenses throughout the fiscal year.
While the company experienced record Valentine’s Day sales in February, overall performance for the month was subdued. Unseasonably cold weather across the United States impacted apparel sales, and declining consumer confidence resulted in weaker demand for discretionary categories.
This remains a core vulnerability for Target, which derives a significant portion of its revenues from discretionary segments such as home goods, hard lines and apparel. These categories are inherently volatile and susceptible to external shocks. Compounding the uncertainty are persistent risks tied to U.S.-China tariff dynamics. We expect comparable sales to decrease 1%, with the average transaction amount anticipated to drop 1.6%.
Nonetheless, Target’s focus on innovation, digital growth and store enhancements is likely to have contributed to first-quarter performance. By combining a strong physical store presence with expanding e-commerce capabilities, the company improved convenience and flexibility for customers. Initiatives like same-day services and curbside pickup, along with a growing Target Circle membership, are likely to have driven increased traffic and engagement. The success of Target’s private label brands and its balanced product mix are other catalysts. Moreover, growth in platforms like Target Plus and Roundel is likely to have contributed to higher-margin revenue streams, supporting overall business momentum in the first quarter.
Target Stock Price Performance
Target’s stock price has advanced 4.3% in the past month compared with the Zacks Retail–Discount Stores industry’s rise of 1.5%. The broader Zacks Retail-Wholesale sector has jumped 12.3%, while the S&P 500 Index has climbed 11.4% during the same period.
Target has outperformed Costco Wholesale Corporation (COST - Free Report) and Dollar General Corporation (DG - Free Report) but underperformed Dollar Tree, Inc. (DLTR - Free Report) in the past month. Shares of Costco and Dollar Tree jumped 1.6% and 9.4%, respectively, while Dollar General declined 0.1%.
Image Source: Zacks Investment Research
Does Target Present a Strong Case for Value Investing?
Target is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 10.67X, which positions it at a discount compared to the industry’s average of 32.49X. The stock is also trading below its median P/E level of 14.65, observed over the past year. Target is trading at a discount to Dollar General (with a forward 12-month P/E ratio of 16.24), Dollar Tree (16.03) and Costco (52.53).
Image Source: Zacks Investment Research
Target Stock Analysis: Best Move for Investors
Target is navigating a tough retail environment with ongoing challenges in discretionary spending, margin pressure and soft guidance weighing on investor sentiment. Although the company is investing in digital growth and operational improvements, the benefits may take time to materialize. For now, the stock lacks strong near-term catalysts. New investors may want to wait for clearer signs of recovery, while existing holders should consider reducing their position if short-term performance is a concern.
Final Thoughts on Target’s Q1 Outcome
Given the mix of near-term headwinds and long-term strategic strengths, Target stock may warrant a cautious approach ahead of its Q1 earnings release. While external pressures, such as weak discretionary demand and macroeconomic uncertainty, could weigh on results, the company’s ongoing investments in digital capabilities, private labels and customer experience offer a foundation for future recovery. Investors may want to wait for clearer signs of stabilization in sales trends and margin performance before making a decisive move.