Jefferies analysts raised the price target for Walmart (NYSE:WMT) to $195 from $190 and Target (NYSE:TGT) to $170 from $150 in a note Tuesday, maintaining a Buy rating on both names.
In their note, the analysts said that heading into fourth quarter prints, they don't expect many retailers such as WMT, TGT, BJ, TJX and DG to report major earnings surprises based on their analysis of alternative data sets.
"We expect WMT will report a modest sales beat and guide FY'25 conservatively given the possibility of wider-spread deflation," the analysts wrote. "We are raising our WMT U.S. comp sales est to be 80bps ahead of the Street and relatively in line with whisper numbers."
For TGT, they explained that the firm's comp index, which incorporates foot traffic and spending data, is estimating that comp sales will be down year-on-year more than last quarter.
"Our indicator estimates comp sales will be (5.0%), which is lower than our Q3 estimate of (4.2%) vs. the actual of (4.9%)," stated the analysts. "We are lowering our comp sales est to (5.0%) and reiterating our margin forecasts. Our Q4 EPS is in line with consensus at $2.40."
Elsewhere, Jefferies noted that traffic at the dollar stores remained challenged in December, while off-price trends were relatively stable in Q4.