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Key Takeaways
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Target is scheduled to post its fourth-quarter earnings report on Tuesday, with analysts seeing substantial upside for the retailer's stock.
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Sales and profit for Target are expected by analysts to decline from the same time a year ago, while comparable store sales are projected to rise.
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Analysts have said lately that they expect Target will be conservative in its 2025 forecasts, and they are looking for updates on executive succession planning.
Target (TGT) is set to report fourth-quarter earnings on Tuesday morning, with analysts seeing substantial upside for the retailer's stock.
Analysts' ratings are split nearly evenly, with five "buy" and six "hold" ratings among the brokers who currently follow Target and are tracked by Visible Alpha. Their average price target of just under $145 suggests about 18% upside to Friday's close and would put the stock back at late-January levels.
The retailer is expected to report revenue of $30.77 billion for the quarter and adjusted earnings per share of $2.26, down 3.6% and 24%, respectively, from the same time a year ago. At the same time, analysts expect comparable store sales to rise 1.39% year-over-year, a consensus figure that Morgan Stanley analysts noted this week has risen since Target lifted its comparable sales projection in January.
Analysts Expect Conservative 2025 Outlook, Question CEO Succession
Analysts from JPMorgan, Oppenheimer, and Morgan Stanley all said in recent notes that they expect Target will likely follow some of its retail rivals like Walmart (WMT) and Home Depot (HD) and remain conservative in their first-quarter and 2025 projections.
Despite a potential conservative 2025 forecast—and concerns over the impact of tariffs and inflation on discretionary spending—Oppenheimer analysts said they "continue to believe shares have bottomed" and said they would "take advantage of any volatility" after the report. They noted that Target shares have fallen after two of the past four earnings reports, with double-digit swings after four of the last five.
JPMorgan and Morgan Stanley analysts also raised the question of succession planning entering 2025, as CEO Brian Cornell recently passed 10 years in the top job. JPMorgan analysts said Cornell planned to stay for three more years as of September 2022, and said they believe an internal candidate to replace him is "most likely."
Target shares are down about 18% over the last 12 months. They rose Friday, finishing the week a bit above $124 apiece.
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