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Should Investors Buy Target's (TGT) Stock as Q2 Earnings Approach?
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Set to report its Q2 results on Wednesday, August 21, Target (TGT - Free Report) will be hoping to follow Walmart’s (WMT - Free Report) footsteps with its omnichannel retail peer exceeding quarterly top and bottom line expectations last Thursday.
Notably, Walmart’s stock is up +7% since its strong Q2 results and has now soared +40% year to date to largely outperform Target’s +2%. That said, let’s see if a post-earnings rally could be in store for Target and if it's time to buy TGT for a sharper rebound.
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Target’s Q2 Expectations
With Target continuing to move past shrink among other inventory issues, its Q2 sales are projected to be up 2% to $25.23 billion. More importantly, Q2 earnings are expected at $2.18 per share which would be a 21% increase from EPS of $1.80 in the comparative quarter.
Target has exceeded earnings expectations in three of its last four quarterly reports but most recently missed Q1 EPS expectations by -1% in May with earnings at $2.03 per share compared to the Zacks Consensus of $2.05.
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Growth & Outlook
Based on Zacks estimates, Target’s total sales are now slated to be virtually flat in its current fiscal 2025 but are expected to rise 3% in FY26 to $110.68 billion. On the bottom line, annual earnings are projected to rise 3% in FY25 and are forecasted to jump another 12% in FY26 to $10.39 per share.
Image Source: Zacks Investment Research
Valuation Comparison
Trading at around $144, Target’s stock is at a 15.7X forward earnings multiple which is a noticeable discount to Walmart’s 30.1X and the S&P 500’s 23.4X. Furthermore, TGT trades well below its decade-long high of 30.4X forward earnings and is at a slight discount to the median of 16.3X during this period.
Image Source: Zacks Investment Research
Bottom Line
Based on Target’s valuation and favorable growth trajectory its stock could certainly be in store for a post-earnings rally if the company can reach or exceed its Q2 expectations. For now, Target’s stock lands a Zacks Rank #3 (Hold) as delivering promising quarterly results and positive guidance will be crucial to more upside in TGT.
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Should Investors Buy Target's (TGT) Stock as Q2 Earnings Approach?
Set to report its Q2 results on Wednesday, August 21, Target (TGT - Free Report) will be hoping to follow Walmart’s (WMT - Free Report) footsteps with its omnichannel retail peer exceeding quarterly top and bottom line expectations last Thursday.
Notably, Walmart’s stock is up +7% since its strong Q2 results and has now soared +40% year to date to largely outperform Target’s +2%. That said, let’s see if a post-earnings rally could be in store for Target and if it's time to buy TGT for a sharper rebound.
Image Source: Zacks Investment Research
Target’s Q2 Expectations
With Target continuing to move past shrink among other inventory issues, its Q2 sales are projected to be up 2% to $25.23 billion. More importantly, Q2 earnings are expected at $2.18 per share which would be a 21% increase from EPS of $1.80 in the comparative quarter.
Target has exceeded earnings expectations in three of its last four quarterly reports but most recently missed Q1 EPS expectations by -1% in May with earnings at $2.03 per share compared to the Zacks Consensus of $2.05.
Image Source: Zacks Investment Research
Growth & Outlook
Based on Zacks estimates, Target’s total sales are now slated to be virtually flat in its current fiscal 2025 but are expected to rise 3% in FY26 to $110.68 billion. On the bottom line, annual earnings are projected to rise 3% in FY25 and are forecasted to jump another 12% in FY26 to $10.39 per share.
Image Source: Zacks Investment Research
Valuation Comparison
Trading at around $144, Target’s stock is at a 15.7X forward earnings multiple which is a noticeable discount to Walmart’s 30.1X and the S&P 500’s 23.4X. Furthermore, TGT trades well below its decade-long high of 30.4X forward earnings and is at a slight discount to the median of 16.3X during this period.
Image Source: Zacks Investment Research
Bottom Line
Based on Target’s valuation and favorable growth trajectory its stock could certainly be in store for a post-earnings rally if the company can reach or exceed its Q2 expectations. For now, Target’s stock lands a Zacks Rank #3 (Hold) as delivering promising quarterly results and positive guidance will be crucial to more upside in TGT.