What happened:
Shares of general merchandise retailer Target (NYSE:TGT) rose 15.1% in premarket trading after the company reported a beat and raise quarter. Target beat analysts’ expectations for revenue, gross margin and earnings per share. Sales growth was broad-based, as the company saw an increase in foot traffic across all six major retail categories. Looking ahead, it raised its full-year earnings forecast. Overall, this was a solid quarter with some key areas of upside.
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What does the market tell us:
Target shares are somewhat volatile, having experienced four swings of over 5% in the last year. But swings this big are very rare even for Target, and that suggests to us that this news had a significant impact on the market’s perception of the company.
The last major move we reported on was 6 days ago, when the company gained 5.9% after news that major indexes soared (Nasdaq +1.9%, S&P +1.2%) after Walmart’s earnings and retail sales data showed strong consumption patterns in the US economy. Walmart beat analysts’ revenue and earnings forecasts in Q2 2024. In addition, the company also raised its full-year net sales and earnings per share forecast, another big positive.
CFO John David Rainey added: “We are seeing our members and customers remain selective, discerning and appreciative, focusing on things like essentials rather than unnecessary items. Importantly, however, we are not seeing any further deterioration in consumer health.”
Target is up 12.4% year-to-date, but at $160.88 per share, it is still trading 9.5% below its 52-week high of $177.82 set in March 2024. Investors who bought $1,000 worth of Target stock 5 years ago would be looking at an investment worth $1,562 today.
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