Latest news with #Lackluster
Business Insider
24-05-2025
- Business
- Business Insider
Target (TGT) Maintains Dividend King Status Despite Brutal Market
Shares of Target (TGT), once considered a blue-chip stock by many investors, are down 40% over the past year. A 5% selloff following the release of a disappointing Q1 earnings report only compounded matters. However, things are not as bad as they seem over at Target. Confident Investing Starts Here: While the Minneapolis-based company is grappling with challenges, I'm bullish on shares of the beleaguered retailer based on its inexpensive valuation, attractive dividend yield, and remarkable track record of consistent dividend growth. Additionally, sell-side analysts see potential upside of over 10% for the stock over the next 12 months, highlighting the value at hand. Target's Lackluster Results Spell Opportunity Target reported disappointing Q1 earnings, in which first-quarter sales fell 3%. This was due to challenges that many companies are facing, like tariff uncertainty and a cautious consumer spending environment. This also caused management to lower full-year sales guidance to a low-single-digit decline (down from up 1%) and full-year EPS guidance to a range of $7-9 per share (down from $8.80-9.80). CEO Brian Cornell acknowledged the challenges Target faced in the first quarter, noting that 'In the first quarter, our team and our business faced an exceptionally challenging environment that affected our performance with declines in both traffic and sales, most notably in our discretionary categories.' He pointed to broader economic pressures, adding that the company encountered 'additional headwinds this quarter, including five consecutive months of declining consumer confidence, uncertainty regarding the impact of potential tariffs…' and other factors. While these issues are widespread across the retail sector and not unique to Target, they are expected to ease over time as consumer sentiment improves and clarity emerges on trade policy. In the meantime, Cornell remains confident in the company's ability to manage through the turbulence, stating, 'We have many levers to use in mitigating the impact of tariffs, and price is the very last resort,' and emphasizing that Target's 'strategy is to remain price competitive by leveraging the capabilities, long-standing relationships, and the scale that set us apart for many of our retail peers.' Separately, Target is facing criticism from some activists over the rollback of DEI initiatives. However, in today's highly polarized environment, companies often face backlash no matter their direction, making this more of a reflection of broader societal tensions than a uniquely Target issue. Discounted Valuation Target must contend with its share of challenges, but after the selloff, the stock became too cheap to ignore. Shares now trade at just 12x forward earnings estimates, a steep discount to the broader market, as the S&P 500 (SPX) currently trades for 21.5x. While they aren't necessarily apples-to-apples comparisons based on the different ways their business models and businesses skew (for example, Target has more exposure to discretionary spending), it's also worth noting that Target is considerably cheaper than big-box retail peers like Walmart (WMT) and Costco (COST). Walmart trades for 36.9x forward earnings estimates, while Costco trades for 56.7x. Analysts expect Target to earn $8.28 per share for fiscal 2026, and the stock looks even cheaper trading at 11.2x. Target itself guided to $7-9 in earnings per share for 2025. Even being conservative and using the low end of this estimate, $7, would yield a very reasonable price-to-earnings ratio of 13.5. Ultimate Dividend Stock Recent results highlight Target's struggles and the challenges the company is facing, but they don't diminish the fact that Target is, in many ways, the ultimate dividend stock. In fact, with 56 consecutive years of dividend growth under its belt, Target is officially a Dividend King (a select group of stocks that have increased their dividend payout for 50 years in a row or more). This is the type of consistency and longevity that income investors can count on. The company has grown its dividend at a healthy 11.5% compound annual growth rate (CAGR) over the past five years. In addition to this remarkable consistency, Target is becoming quite attractive from a dividend yield perspective. After the selloff, shares now yield 4.8%. These are orders of magnitude higher than the S&P 500 (SPX), which currently yields just 1.3%. It also means that Target's yield surpasses that of 10-year treasury bonds, which currently yield 4.5%. Based on Target's standing as a Dividend King and its dividend payout ratio of roughly 50%, there also appears to be little chance of the dividend being reduced in the near future. Target is also returning capital to shareholders with share buybacks. During the quarter, the company repurchased $251 million worth of shares. Unfortunately, the average price for these shares was $114.60, which is now quite a bit higher than today's share price. The good news is that Target still has a massive $8.4 billion of capacity in its share repurchase authorization, so the company should be able to continue to reduce its share count over time at lower prices. Is Target a Buy, Sell, or Hold? TGT earns a Hold consensus rating based on 10 Buys, 21 Hold, and two Sell ratings assigned in the past three months. TGT's average stock price target is $105.46, implying an 11% upside potential from current levels. Dividend Strength Affirms Long-Term TGT Play Target's recent results reflect the ongoing challenges facing the company, particularly in the current economic and policy environment. However, greater clarity around tariffs is likely to emerge in time, allowing Target to adapt its strategy accordingly. With a 56-year track record of consistently paying—and steadily increasing—its dividend, the company has demonstrated resilience and long-term stability. Meanwhile, the stock's 40% decline has brought valuations down to compelling levels, trading at approximately 12x forward earnings, well below the broader market and key peers such as Walmart and Costco. The current 4.9% dividend yield and continued share repurchases enhance total shareholder return. While a complete recovery may take time, these fundamentals suggest that long-term investors willing to look past short-term headwinds could be well positioned to benefit from Target's enduring strength as a Dividend King.
Time of India
01-05-2025
- Business
- Time of India
Gloomy retail earnings show consumers are feeling the pinch of US tariffs
Lackluster quarterly results from consumer-facing companies including McDonald's and Harley-Davidson are the latest sign that American shoppers are curbing spending amid shifting U.S. trade policies. McDonald's posted a surprise decline in quarterly global sales on Thursday and said it was navigating the "toughest of market conditions". It echoed recent warnings from restaurant operators Domino's Pizza, Chipotle Mexican Grill and Starbucks that Americans were spending less on dining out. Cosmetics maker Estee Lauder forecast a bigger-than-expected drop in fiscal 2025 sales, while motorbike maker Harley-Davidson joined a spate of companies this week in pulling forecasts, citing the uncertain macroeconomic environment. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Investors have been worried that the Trump administration's tariff plans will spur a resurgence in inflation and hurt global economic growth, in turn deterring discretionary spending. "It's very difficult for retailers to give solid guidance and not be conservative when they don't know what they're going to be able to get in terms of inventories, especially ones that come from China," said Art Hogan, chief market strategist at B Riley Wealth. Live Events Estee Lauder said sales in the Americas declined primarily due to a dip in "consumer confidence and sentiment", which led to elevated inventory levels and destocking at certain retailers. The U.S. economy contracted in the first quarter for the first time in three years, data on Wednesday showed, and consumer spending - which accounts for more than two-thirds of the economy - grew at 1.8% after a robust 4% pace in the fourth quarter. The United States has approached China, seeking talks over Trump's 145% tariffs, a social media account affiliated with Chinese state media said on Thursday, potentially signaling Beijing's openness to negotiations. Trump instituted sweeping tariffs in early April, unleashing a wave of selling across stocks worldwide and prompting several companies to either withdraw guidance or warn about their performance in the coming months. Fast-casual chain Shake Shack posted weaker-than-expected first-quarter revenue on Thursday and said it was factoring in some level of pressure on consumer spending as well as headwinds from higher inflation this year. However, results from card companies Mastercard and Visa signaled resilience in consumer spending. "Visa and Mastercard data say consumers are doing fine, but reports from the likes of McDonald's suggest that it's still the higher-income shopper that is doing the heavy lifting," said Brian Jacobsen, chief economist at Annex Wealth Management. "It's an unsustainable situation and likely to break towards a breakdown in spending without a tariff reprieve soon."
Yahoo
05-02-2025
- Yahoo
Man Who Claimed to Be Hollywood Producer Found Guilty of Murder, Rape in Overdose Deaths
A serial rapist who lured women into his orbit by lying that he was a Hollywood producer has been convicted of two counts of first-degree murder in the deaths of Christy Giles and Hilda Marcela Cabrales-Arzola. A Los Angeles jury, after two days of deliberating, sided with prosecutors on all charges, which included the sexual assaults of seven other victims from 2007 to 2021. The two deceased women met David Pearce at a warehouse party in East Los Angeles before he fatally drugged them at his Beverly Hills apartment. Giles was deceased when she was dropped off at the hospital, while Cabrales-Arzola died eleven days later. An investigation initiated after their deaths discovered that Pearce had raped several women across more than a decade. More from The Hollywood Reporter Whoopi Goldberg Slams Fox News Critics Angry Over Beyoncé's Best Country Album Grammy Win 'Deva' Review: Rosshan Andrrews Remakes His Own 'Mumbai Police,' With Lackluster Results Billie Eilish Sends Care Package to L.A. Wildfire Victim at the Request of Meghan Markle Pearce is scheduled to be sentenced on March 13. He faces 148 years to life in prison. In a statement, newly-installed L.A. district attorney Nathan Hochman stressed that his office will 'prosecute to the fullest extent of the law those who illegally supply fentanyl and destroy lives, especially those who commit sexual assaults.' He added, 'Today, a serial rapist was held accountable for the deaths of Christy Giles and Hilda Marcela Cabrales-Arzola, both of whom tragically died as a result of fentanyl poisoning, and the victimization of seven other women across Los Angeles,' while celebrating the women who 'bravely came forward to report the crimes committed against them.' The jury was unable to reach a verdict on charges of accessory after the fact, which relate to knowledge of a crime, against aspiring actor Brandt Walter Osborn. The court declared a mistrial. It remains unknown whether prosecutors will pursue a retrial. Giles and Cabrales-Arzola died from an overdose of fentanyl and date rape drug GHB. They arranged for a rideshare service to pick them up from Pearce's apartment within an hour of arriving but didn't leave the residence until 11 hours later when they were dropped off at two separate hospitals. Seven women testified of sex crimes committed by Pearce, who described himself as an as an 'entertainment professional,' though it doesn't appear he has any production credits. Best of The Hollywood Reporter Most Anticipated Concert Tours of 2025: Billie Eilish, Kendrick Lamar & SZA, Sabrina Carpenter and More Hollywood's Highest-Profile Harris Endorsements: Taylor Swift, George Clooney, Bruce Springsteen and More Most Anticipated Concert Tours of 2024: Taylor Swift, Bad Bunny, Olivia Rodrigo and More
