Earnings To Watch: Target (TGT) Reports Q3 Results Tomorrow

Adam Hejl /
2023/11/14 2:01 am EST

General merchandise retailer Target (NYSE:TGT) will be reporting earnings tomorrow before market open. Here's what to expect.

Last quarter Target reported revenues of $24.77 billion, down 4.9% year on year, missing analyst expectations by 1.8%. It was a mixed quarter for the company, with an impressive beat of analysts' EPS estimates but underwhelming earnings guidance for the next quarter. The company expects same-store sales to decline more than expected, causing it to lower its full-year revenue and EPS guidance.

Is Target buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Target's revenue to decline 4.8% year on year to $25.24 billion, a further deceleration on the 3.4% year-over-year decrease in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.48 per share.

Target Total Revenue

The analysts covering the company have been growing increasingly bearish about the business heading into the earnings, with revenue estimates seeing six downwards revisions over the last thirty days. The company missed Wall St's revenue estimates three times over the last two years.

Looking at Target's peers in the non-discretionary retail segment, some of them have already reported Q3 earnings results, giving us a hint what we can expect. Sprouts delivered top-line growth of 7.7% year on year, beating analyst estimates by 2% and Grocery Outlet reported revenues up 9.3% year on year, missing analyst estimates by 0.4%. Sprouts traded up 1.5% on the results, Grocery Outlet was down 7.1%.

Read our full analysis of Sprouts's results here and Grocery Outlet's results here.

The fears around raising interest rates have been putting pressure on tech stocks and while some of the non-discretionary retail stocks have fared somewhat better, they have not been spared, with share price declining 2.1% over the last month. Target is down 3.4% during the same time, and is heading into the earnings with analyst price target of $144.3, compared to share price of $107.6.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

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The author has no position in any of the stocks mentioned.