Target Is the Worst S&P 500 Stock After Earnings. Here's Why
Target stock is down big after the retailer missed expectations for its third quarter and slashed its full-year outlook. Here's what Wall Street is saying.
Target (TGT) is the worst S&P 500 stock Wednesday, down more than 20% at last check, after the big-box retailer came up short of top- and bottom-line expectations for its fiscal third quarter and slashed its full-year outlook.
In the three months ended November 2, Target's revenue increased 0.9% year over year to $25.7 billion, buoyed by a 0.3% increase in same-store sales. Its earnings per share (EPS) declined 11.9% from the year-ago period to $1.85.
"We saw several strengths across the business, including a 2.4% increase in traffic, nearly 11% growth in the digital channel, and continued growth in beauty and frequency categories," said Target CEO Brian Cornell in a statement. "At the same time, we encountered some unique challenges and cost pressures that impacted our bottom-line performance."
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results fell short of analysts' expectations. Wall Street was anticipating revenue of $25.9 billion and earnings of $2.30 per share, according to Yahoo Finance.
For its fourth quarter, Target said it expects approximately flat same-store sales and EPS in the range of $1.85 to $2.45. The midpoint of its earnings-per-share forecast, $2.15, came in significantly below the $2.62 per share analysts were calling for.
For the full fiscal year, Target said it now expects earnings per share to arrive between $8.30 to $8.90, down from its previous forecast for earnings of $9 to $9.70.
"Looking ahead, our team is energized and ready to deliver the unique combination of newness and value that holiday shoppers can only find at Target, and we remain confident in the underlying strength and fundamentals of our business, and our ability to deliver on our longer-term financial goals," Cornell said.
Is Target stock a buy, sell or hold?
Heading into Wednesday's session, Target was already lagging the broad market Wall Street is bullish on the big box retailer – up 12% for the year to date on a total return basis (price change plus dividends) vs the S&P 500's 26% gain. But Wall Street was keeping the faith on the consumer staples stock.
According to S&P Global Market Intelligence, the average analyst target price for TGT stock is $173.13, representing implied upside of nearly 12% to its October 19 close. Additionally, the consensus recommendation is Buy. Price-target reductions and/or downgrades could come down the pike following the dismal earnings report.
Financial services firm Oppenheimer is is standing firm on its Outperform rating (equivalent to a Buy) and $156 price target – and thinks that investors should buy the dip on the large-cap stock.
"Earlier this morning, Target reported softer-than-expected third-quarter results. As we telegraphed in our preview, we expected a material comp and earnings shortfall vs Street forecasts, but this was deeper than we anticipated on the bottom line," says Oppenheimer analyst Rupesh Parikh.
"For longer-term players, we would take advantage of the dip this morning," he adds. "The pullback is much greater than we envisioned with our preview where we viewed downside in the mid-$130s/low $140s."
Related Content
- Nvidia Earnings: Updates and Commentary
- Kiplinger's Earnings Calendar for This Week
- Get Ready To Shop Target's Cyber Monday Deals
- Why Walmart Stock's a Buy After Its Beat-And-Raise Quarter
-
Smart Ways to Share a Credit CardAdding an authorized user has its benefits, but make sure you set the ground rules.
-
5 Bruce Springsteen Quotes Every Retiree Should Live ByThe 'Boss' of rock-and-roll has a lot to say about living and getting old gracefully.
-
How the Stock Market Performed in the First Year of Trump's Second TermSix months after President Donald Trump's inauguration, take a look at how the stock market has performed.
-
How the Stock Market Performed in the First Year of Trump's Second Term
Six months after President Donald Trump's inauguration, take a look at how the stock market has performed.
-
If You're in the 2% Club and Have a Pension, the 60/40 Portfolio Could Hold You BackIncome from your pension, savings and Social Security could provide the protection bonds usually offer, freeing you up for a more growth-oriented allocation.
-
Bye-Bye, Snowbirds: Wealthy Americans Are Relocating Permanently for Retirement — and This Financial Adviser Can't Fault Their LogicWhy head south for the winter and pay for two properties when you can have a better lifestyle year-round in a less expensive state?
-
Consider These 4 Tweaks to Your 2026 Financial Plan, Courtesy of a Financial PlannerThere's never a bad time to make or review a financial plan. But recent changes to the financial landscape might make it especially important to do so now.
-
We Know You Hate Your Insurance, But Here's Why You Should Show It Some LoveSure, it's pricey, the policies are confusing, and the claims process is slow, but insurance is essentially the friend who shows up during life's worst moments.
-
Dow Adds 292 Points as Goldman, Nvidia Soar: Stock Market TodayTaiwan Semiconductor's strong earnings sparked a rally in tech stocks on Thursday, while Goldman Sachs' earnings boosted financials.
-
What's in Store for the Stock Market in 2026?Wall Street expects the bull market to keep running in the year ahead.
-
Is a Caregiving Strategy — for Yourself and Others — Missing From Your Retirement Plan?Millions of people over 65 care for grandkids, adult kids or aging parents and will also need care themselves. Building a caregiving strategy is crucial.
