Target Corporation (NYSE: TGT) announced its Q4 2021 earnings and revenue results on Tuesday, March 1, 2022, in which it topped EPS estimates but missed revenue projections.
What to look for: Strong Q4 performance reinforced the durability of the retailer’s business model and confidence in attaining long-term profitability. The company will continue investing and delivering through its team and via assortment, convenience, ease, and affordability in the near future. For Fiscal 2022 the company anticipates revenue to grow in low to mid-single-digit with quarterly YoY profit performance expected to be variable but improve as the year advances.
Earnings: Stockearning’s Estimated EPS in Q4 was $3.21 per share compared to $2.73 per share a year ago. For the full year, the company had EPS of $14.1 per share relative to $8.64 a year ago. Adjusted EPS in Q$ 2021 was $3.19, while in Q4 2020, it was $2.67. The retailer reported a full-year adjusted EPS of $13.56. Historical EPS Performance shows that in the past 12 quarters, the company has topped estimates 28 times, matched four times, and missed five times.
Revenue: Total revenue was $106 billion for full-year 2021, having grown 35% in the past two years. Comparable sales were up 12.7%, with comp traffic growing 12.3 % compared to a year ago. In addition, target reported that all merchandise segments delivered double-digit comp sales growth last year in addition to the exceptional growth witnessed in 2020.
Stock Movement: TGT shares have lost 25% since the company released its last earnings release. Interestingly, following the earnings release, the company’s shares have been UP 26 times in the past 47 quarters. So, the historical price reaction suggests a 55% probability of the share price going UP following the earnings release. According to the Stockearning algorithm, the predicted volatility on the first day is +/-4%, while the predicted volatility on the seventh day is +/-5%.
What analysts are saying: JPMorgan analyst Christopher Horvers slashed his price target from $292 to $262 and maintained a Buy rating in the shares ahead of quarterly results. Horvers is contrarian positive and prefers the stock.
Deutsche Bank analyst Krisztina Katai slashed the stock’s price target to $312 from $350 but maintained a Buy rating in the shares. Ahead of the Q4 results, the analyst predicted inline reports in the discounter space.
Recently, ahead of the earnings, Evercore ISI analyst Greg Melich commenced a tactical trading call on TGT, but he indicated the call was not on the quarterly report as he anticipated the company to top Wall Street. He stated that the company had done a terrific job in driving traffic growth, although comparisons are becoming challenging, and he is more concerned about calendar 2022 EBIT margin guidance that will range between 7% and 8%.. the analyst has an inline rating in the stock with a price target of $235.
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