Target Corporation (NYSE:TGT) is expected to see a high single-digit negative earnings per share growth of -7.60% over the next three years. Presently, with an EPS of $4.982, we can expect an upcoming EPS of $4.603. To determine whether this negative growth rate expectation is justified, we should take a look at how the company has been performing in the past. Check out our latest analysis for Target
Adverse times ahead
The next couple of years are a potential rough ride for Target. This is based on 23 analysts who estimate earnings dropping to $4.603 from previous levels of around $4.982. This would be a drop of -7.60%, so it will be an interesting ride for any existing shareholders over the next couple of years. In the same period we should see the revenue increase from $69,577M to $73,132M and profits (net income) are predicted to decline from $2,779M to $2,568M in the next couple of years. Furthermore, margins look rather unappealing at the current levels of revenue and earnings.
Is this similar growth to the past?
The past can be an insightful indicator for future performance for a stock. We can determine whether this level of expected growth is relatively reasonable or whether the negative outlook is too harsh. TGT’s earnings growth is expected to go downhill as analysts expect the double-digit earnings growth in the previous couple of years of 14.79% to get worse over time. As a well-established company, TGT could be exhibiting signs of potential market share loss or obsolete products to larger negative growth over time.
Next Steps:
For TGT, I’ve put together three essential aspects you should further examine:
1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
2. Valuation: What is TGT worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether TGT is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of TGT? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.