Stock Story -
What Happened: Shares of general merchandise retailer Target (NYSE:TGT) jumped 5.9% in the morning session after the major indices soared (Nasdaq +1.9%, S&P +1.2%) after Walmart (NYSE:WMT)'s earnings and retail sales data revealed strong consumption patterns in the U.S. economy.
Walmart exceeded analysts' revenue and EPS expectations in Q2'2024. Moving on, the company raised its full year outlook for net sales and EPS as well, another major positive.
CFO, John David Rainey added "We see, among our members and customers, that they remain choiceful, discerning, value-seeking, focusing on things like essentials rather than discretionary items, but importantly, we don't see any additional fraying of consumer health." After the initial pop the shares cooled down to $141.61, up 4.3% from previous close.
Is now the time to buy Target? Find out by reading the original article on StockStory, it’s free.
What is the market telling us: Target’s shares are somewhat volatile and over the last year have had 4 moves greater than 5%. In context of that, today’s move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago, when the stock gained 14.8% on the news that the company reported third quarter results that blew past analysts' EPS expectations, driven by a small beat on revenue, better profitability, and a lower-than-expected tax rate. While same-store sales declined, the rate exceeded analysts' expectations. The company also generated healthy operating cash flows and repositioned its inventory into a healthier position. Next quarter's EPS guidance was slightly ahead of Consensus. Zooming out, we think this was an impressive quarter that should please shareholders, especially in light of some troubling consumer commentary from other companies.
Target is down 1% since the beginning of the year, and at $141.61 per share it is trading 20.4% below its 52-week high of $177.82 from March 2024. Investors who bought $1,000 worth of Target’s shares 5 years ago would now be looking at an investment worth $1,715.
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