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Target's (TGT) Stock Rallies on Earnings & Sales Beat in Q2

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Target Corporation (TGT - Free Report) came out with second-quarter fiscal 2018 results, wherein adjusted earnings of $1.47 per share came ahead of the Zacks Consensus Estimate of $1.40 per share and surged 19.8% year-over-year.

This year-over-year growth can be attributable to higher sales and fall in interest expense as well as share repurchase activity that to an extent offset rise in cost of sales and higher SG&A expenses.

Earnings Estimate Revision: The Zacks Consensus Estimate for fiscal 2018 has been increasing over the past 30 days. However, Target has outperformed the Zacks Consensus Estimate in two of the trailing four quarters by an average of about 0.63%.

Target Corporation Price, Consensus and EPS Surprise

Revenues: The company generated total revenue of $17,776 million that came ahead the Zacks Consensus Estimate of $17,335 million for the sixth straight quarter and increased 6.9% from the year-ago quarter. Sales rose 7% to $17,552 million, while other revenue remained flat at $224 million.

Comparable sales for the quarter increased 6.5% compared with 1.3% growth witnessed in the year-ago period. The number of transactions rose 6.4%, while the average transaction amount jumped 0.1%

Outlook: The company projects adjusted earnings in the range of $1.00-$1.20 per share for the third quarter as compared to 90 cents reported in the year ago quarter. Further, it expects adjusted earnings in the range of $5.30-$5.50 for fiscal 2018, up from the prior year guidance in the range of $5.15-$5.45.

Additionally, Target anticipates comparable sales growth in third quarter and second half of 2018 to be in line with 4.8% reported in the first half.

Key Events: The company repurchased shares for approximately $431 million during the quarter, when it paid dividends worth $330 billion.

Zacks Rank: Currently, Target carries a Zacks Rank #2 (Buy) which is subject to change following the just released earnings results. You can see the complete list of today’s Zacks #1 Rank stocks here.

Market Reaction

Target shares were up by 5.8% following the release. It would be interesting to see how the market reacts to the results during the trading session today.

Check back later for our full write up on Target’s earnings report!

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