Goal Q3 preview: Is the retailer subsequent in line for an earnings beat regardless of margin woes?

Goal (NYSE:TGT) is scheduled to announce Q3 earnings outcomes on Wednesday, Nov. 16, earlier than market open.

The consensus EPS estimate is $2.18 (-28.1% Y/Y) and the consensus income estimate is $26.4B (+2.9% Y/Y).

Over the past 2 years, TGT has crushed EPS and income estimates 75% of the time.

Over the past 3 months, EPS estimates have seen 1 upward revision and 23 downward. Income estimates have seen 5 upward revisions and 13 downward.

Walmart’s (WMT) Q3 earnings smasher earlier within the day indicated that whereas customers reduce on spending, they’re nonetheless looking for higher offers amid excessive inflation, which may imply constructive outcomes for Goal (TGT) as effectively.

Jefferies upgraded Goal (TGT) to Purchase because it believes the the retail large is beginning to work via margin points after stock development outpaced gross sales development for the previous three quarters.

KeyBanc expects Goal (TGT) to choose up extra market share amid defensive development, margin restoration and e-commerce energy.

Goal (TGT) was added as a finest brief at Hedgeye attributable to stock points amid aggressive strain from 80-90% of shops that might be aggressively clearing product.

Q2 recap:

• Goal (TGT) shares fell after its Q2 outcomes missed estimates, harm by larger prices and margin strain.
• Morgan Stanley mentioned site visitors and top-line developments appeared encouraging, however the Q2 miss and excessive stock stage nonetheless poses dangers.
• However Wells Fargo has an optimistic view of a powerful margin and earnings restoration subsequent yr.

Current information:

• Goal (TGT) sought to rent 100K staff and prolong promotions via the vacation season, beginning its promotions “sooner than ever” from Oct. 6.
• Goal (TGT) CEO Brian Cornell will stay in his position on the for approx. three extra years. The agency scrapped its 65-year age retirement coverage for its CEO.

SA contributor The Alpha Sieve in an evaluation mentioned whereas there’s potential for Goal (TGT) to shock positively, risk-reward on weekly and relative energy charts aren’t nice.

Shares of Goal (TGT) declined 32% YTD, underperforming the S&P 500 index by a large margin and the Dow Jones U.S. retail index by a narrower margin.