Latest news with #TargetCorp
Forbes
5 days ago
- Business
- Forbes
Is Target Blaming Boycotts For Its Slump?
Is Target Blaming Boycotts For Its Slump? getty The country's seventh largest retailer has been the bullseye for grassroots consumer boycotts, but the real cause of its woes is in the c-suite. For a moment there, at the onset of the COVID-19 quarantine, Target seemed to be riding high on a wave of innovation that broke out when retailers of every stripe and category had to scramble to save their businesses from a global catastrophe. As we reported here in 2021, Target managed a rapid roll-out of an experimental click-and-curbside-collect program while simultaneously building out a credible e-commerce platform to drive sales. The gambit was a big success. Target's e-commerce business boomed, growing faster than Amazon and Walmart. The company won kudos for touches such as placing well-staffed pickup counters directly in front of the main entrance, ensuring crisp customer service. Shoppers were spared from standing in long lines and were more inclined to park and take a stroll through the store before leaving. What a difference a pandemic makes. Over the past two years, Target has found itself on fumbling defense. At this time a year ago, the company first started reporting that a long stretch of revenue growth had run out of gas because (according to Target execs) its customer base had been spending less on nesting (think throw pillows and furnishings) and more on travel and entertainment. For its fiscal year that ended on January 31, 2024, the company said revenue retreated by 1.6% and comparable store sales sagged by nearly 4%. In sharp contrast, both Walmart and Costco—with overlapping customer bases—posted annual revenue growth of more than 6%. What went wrong? A series of clear leadership missteps? Among the explanations was a boycott over an in-store Pride Month promotion in 2023 that backfired spectacularly. Also in 2023, Target closed nine stores in urban areas citing theft and violence, but an in-depth CNBC investigation claimed it found that crime rates were actually lower at the closed stores than at other nearby stores that remained open. The difference: stores that stayed open were in higher-income neighborhoods. According to CNBC, the findings, 'cast doubt on Target's explanation for the store closures and raise questions about whether the company's announcement was designed to advance its legislative agenda and obscure poor financial performance.' Target ran into yet another publicity buzzsaw last year during Black History Month when several historical figures such as Booker T. Washington were misidentified on a collection of refrigerator magnets. And a customer filed a class action lawsuit claiming the company 'surreptitiously' operated an anti-theft surveillance system that violated Illinois' Biometric Information Privacy Act. In the head-to-head competition with rivals, Target has seemed to be running a me-too campaign. It was late in developing a robust line of private label merchandise, far behind Walmart and Costco. And the company ballyhooed a long-term plan to add 300 mostly full-sized locations just as its rivals were planning smaller stores in neighborhood shopping centers. Finally, four days after the new administration took office in November, Target dismantled its DEI efforts—in which it had invested a lot of brand capital—which unleashed a fresh wave of scorn. The latest news is more bleakness for the nation's seventh-largest retailer. Since January, foot traffic has been steadily declining. The company's management has been mostly silent, according to a recent report on Forbes, and analysts describe the company's woes as self-inflicted' and its leadership as 'drifting.' Given the current economic cycle, with so much uncertainty and wariness among consumers, it's hard to imagine what Target could do to rescue itself from itself. Before the pandemic there were rumors that Amazon had its eye on acquiring the company as a quick way to create a bricks-and-mortar presence that could compete with Walmart, Costco, and others. Nothing became of the Amazon rumor, and it is harder to imagine today than it might have been in 2019. But it will probably take a shake-up of equal magnitude—a leveraged buyout and a clean c-suite slate, perhaps—and a major rebranding to reverse the slide and possibly resurrect Target's once-coveted cachet as the classy discount store. Investors might consider, what has been the 5-year return on invested shares? As of today, negative twenty-one percent (-21%) roughly vs S&P at plus ninety-four percent (+94%).
Yahoo
7 days ago
- Business
- Yahoo
Citi Keeps Neutral Stance on Target (TGT), Cuts PT
On May 22, Citi analyst Paul Lejuez lowered the firm's price target on Target Corp. (NYSE:TGT) to $94 from $97, keeping a Neutral rating on the shares. The downgrade came in response to the company's weaker-than-expected fiscal Q1 2025 results reported on May 21. Management lowered the company's guidance for fiscal year 2025, which, according to the analyst, suggests that weak sales trends observed in Q1 are expected to continue. A woman purchasing groceries at a Target store, with a cart full of products. Target Corp. (NYSE:TGT) reported net sales of $23.8 billion, compared with $24.5 billion in 2024. Comparable sales dropped 3.8% in fiscal Q1 2025, with a 5.7% decline in comparable store sales. Management now expects a low-single-digit decline in sales for fiscal 2025, along with a GAAP EPS of $8.00 to $10.00. Adjusted EPS is anticipated to be in the $7.00 to $9.00 range. The analyst told investors in a research note that the lower fiscal 2025 guidance "seems to provide cushion" after a weak quarter, with higher-than-planned apparel and home inventories and a loss in market share in more than half of the company's 35 categories. However, the firm believes the earnings guidance has not been "derisked." The analyst opined that Target's (NYSE:TGT) gross margin pressure is likely to extend to H2 2025 since it is dealing with headwinds "that may not be quick to improve." While we acknowledge the potential of TGT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than TGT and that has 100x upside potential, check out our report about the . READ NEXT: and . Disclosure: None. Sign in to access your portfolio
Yahoo
27-05-2025
- Business
- Yahoo
This Dirt-Cheap Dividend King Stock Yields 4.7%. Here's Why It's Worth Doubling Up on in May.
Target is hovering around six-year lows. Guidance calls for a third consecutive year of negative growth. Target is trading at a historically low valuation. 10 stocks we like better than Target › In the span of just 52 weeks, Target (NYSE: TGT) has traded as low as $87.35 per share and as high as $167.40 per share. Unfortunately for investors, Target is hovering around the low end of that range at about $95 per share at the time of this writing. The sell-off in Target stock, paired with decades of dividend raises, has pushed Target's dividend yield up to a hefty 4.7%. Here's why Target is a dividend stock worth doubling up on in May, even though its challenges are far from over. On its latest earnings call, Target blamed weakening consumer confidence and tariffs on top of an extended period of inflation as reasons for its poor results. Target's first-quarter net sales were down 2.8% due to lower traffic. Target held or gained market share in 15 out of its 35 merchandising divisions. However, its goal is to grow market share across the majority of its assortment. On its first-quarter earnings call, Target said it was not satisfied with its first-quarter performance. Target CEO Brian Cornell said the following in Target's earnings press release: While our sales fell short of our expectations, we saw several bright spots in the quarter, including healthy digital growth, led by a 36% increase in same-day delivery through Target Circle 360, and our strongest designer collaboration in more than a decade, Kate Spade for Target. While these highlights reinforce our confidence in the underlying health of our business, we're not satisfied with current performance and know we have opportunities to deliver faster progress on our roadmap for growth. Although Target expressed accountability for the poor results and a plan for returning to growth, the company's updated guidance indicates the pain is far from over. Less than three months ago, Target forecast fiscal 2025 adjusted earnings per share of $8.80 to $9.80, net sales growth of around 1%, and a modest increase in operating margins compared to fiscal 2024. Now, Target is guiding for just $7 to $9 in fiscal 2025 adjusted EPS and a low single-digit decline in sales. What makes Target's significant guidedown even worse is that Target is coming off fairly weak comps in fiscal 2024 -- a year in which it grew comparable sales by just 0.1%, traffic by 1.4%, and booked $8.86 in adjusted EPS compared to $8.94 in fiscal 2023 adjusted EPS. Target's poor results are reflected in its flatlining sales growth and weak operating margins, which were rebounding nicely off their pandemic lows but have since stagnated. The silver lining is that Target's sales and earnings are still above pre-pandemic levels. And yet, its stock price is hovering around a six-year low -- indicating that investors have little confidence in Target's turnaround. The good news is that Target's valuation already reflects these concerns. Despite its weak results, Target is still a highly profitable company that can fund its growing dividend and its long-term growth efforts in new store openings, existing store remodels, technology, and supply chain improvements. The midpoint of Target's forecast adjusted EPS guidance of $8 per share is significantly higher than its $4.48 per share dividend payment. Typically, when a company is undergoing a turnaround and has a growing dividend, the dividend expense begins to balloon to a point where the company can barely afford it. But that isn't the case with Target. This is a company that has paid and raised its dividend for 53 consecutive years -- making it part of an elite group of companies known as Dividend Kings that have raised their payouts for at least 50 years. Over the decades, Target has raised its payout year after year, whether the economy was contracting or expanding. Even now, its dividend is affordable and sports a 4.7% yield. However, one of the best reasons to buy Target is for its valuation. Target would have a price-to-earnings (P/E) ratio of just 11.9 based on the midpoint of its adjusted fiscal 2025 earnings forecast and the stock price at the time of this writing of around $95 a share. That's a bargain-bin price for an established company like Target. For context, Target's 10-year median P/E is 15.6. Target continues to overpromise and underdeliver, so it's understandable why investors have grown impatient with the company. However, Target's valuation suggests it is facing an existential crisis -- and that's far from the case. Target needs a new strategy focused on leaning into what it does best, which is in-store experience, rather than trying to go toe-to-toe with Walmart and Amazon on value. Promotions are yet another way to differentiate Target from the competition. Target has had resounding success with partnerships in the past. Even in the latest quarter, Target's collaboration with Kate Spade was the most successful limited-time partnership Target has had in over a decade. In sum, Target has a clear path toward regaining its mojo. The stock is worth doubling up on in May for investors looking to buy a turnaround stock and generate passive income. However, some investors may prefer to keep Target on a watchlist until the company can prove its strategic initiatives translate to bottom-line results. Before you buy stock in Target, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Target wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor's total average return is 957% — a market-crushing outperformance compared to 167% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Target, and Walmart. The Motley Fool has a disclosure policy. This Dirt-Cheap Dividend King Stock Yields 4.7%. Here's Why It's Worth Doubling Up on in May. was originally published by The Motley Fool
Globe and Mail
27-05-2025
- Business
- Globe and Mail
This Dirt-Cheap Dividend King Stock Yields 4.7%. Here's Why It's Worth Doubling Up on in May.
In the span of just 52 weeks, Target (NYSE: TGT) has traded as low as $87.35 per share and as high as $167.40 per share. Unfortunately for investors, Target is hovering around the low end of that range at about $95 per share at the time of this writing. The sell-off in Target stock, paired with decades of dividend raises, has pushed Target's dividend yield up to a hefty 4.7%. Here's why Target is a dividend stock worth doubling up on in May, even though its challenges are far from over. Target just slashed its guidance On its latest earnings call, Target blamed weakening consumer confidence and tariffs on top of an extended period of inflation as reasons for its poor results. Target's first-quarter net sales were down 2.8% due to lower traffic. Target held or gained market share in 15 out of its 35 merchandising divisions. However, its goal is to grow market share across the majority of its assortment. On its first-quarter earnings call, Target said it was not satisfied with its first-quarter performance. Target CEO Brian Cornell said the following in Target's earnings press release: While our sales fell short of our expectations, we saw several bright spots in the quarter, including healthy digital growth, led by a 36% increase in same-day delivery through Target Circle 360, and our strongest designer collaboration in more than a decade, Kate Spade for Target. While these highlights reinforce our confidence in the underlying health of our business, we're not satisfied with current performance and know we have opportunities to deliver faster progress on our roadmap for growth. Although Target expressed accountability for the poor results and a plan for returning to growth, the company's updated guidance indicates the pain is far from over. Less than three months ago, Target forecast fiscal 2025 adjusted earnings per share of $8.80 to $9.80, net sales growth of around 1%, and a modest increase in operating margins compared to fiscal 2024. Now, Target is guiding for just $7 to $9 in fiscal 2025 adjusted EPS and a low single-digit decline in sales. What makes Target's significant guidedown even worse is that Target is coming off fairly weak comps in fiscal 2024 -- a year in which it grew comparable sales by just 0.1%, traffic by 1.4%, and booked $8.86 in adjusted EPS compared to $8.94 in fiscal 2023 adjusted EPS. Target's poor results are reflected in its flatlining sales growth and weak operating margins, which were rebounding nicely off their pandemic lows but have since stagnated. TGT Revenue (TTM) data by YCharts The silver lining is that Target's sales and earnings are still above pre-pandemic levels. And yet, its stock price is hovering around a six-year low -- indicating that investors have little confidence in Target's turnaround. The good news is that Target's valuation already reflects these concerns. Target can afford its sizable dividend Despite its weak results, Target is still a highly profitable company that can fund its growing dividend and its long-term growth efforts in new store openings, existing store remodels, technology, and supply chain improvements. The midpoint of Target's forecast adjusted EPS guidance of $8 per share is significantly higher than its $4.48 per share dividend payment. Typically, when a company is undergoing a turnaround and has a growing dividend, the dividend expense begins to balloon to a point where the company can barely afford it. But that isn't the case with Target. This is a company that has paid and raised its dividend for 53 consecutive years -- making it part of an elite group of companies known as Dividend Kings that have raised their payouts for at least 50 years. Over the decades, Target has raised its payout year after year, whether the economy was contracting or expanding. Even now, its dividend is affordable and sports a 4.7% yield. However, one of the best reasons to buy Target is for its valuation. Target would have a price-to-earnings (P/E) ratio of just 11.9 based on the midpoint of its adjusted fiscal 2025 earnings forecast and the stock price at the time of this writing of around $95 a share. That's a bargain-bin price for an established company like Target. For context, Target's 10-year median P/E is 15.6. Target has fallen far enough Target continues to overpromise and underdeliver, so it's understandable why investors have grown impatient with the company. However, Target's valuation suggests it is facing an existential crisis -- and that's far from the case. Target needs a new strategy focused on leaning into what it does best, which is in-store experience, rather than trying to go toe-to-toe with Walmart and Amazon on value. Promotions are yet another way to differentiate Target from the competition. Target has had resounding success with partnerships in the past. Even in the latest quarter, Target's collaboration with Kate Spade was the most successful limited-time partnership Target has had in over a decade. In sum, Target has a clear path toward regaining its mojo. The stock is worth doubling up on in May for investors looking to buy a turnaround stock and generate passive income. However, some investors may prefer to keep Target on a watchlist until the company can prove its strategic initiatives translate to bottom-line results. Should you invest $1,000 in Target right now? Before you buy stock in Target, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Target wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor 's total average return is957% — a market-crushing outperformance compared to167%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Target, and Walmart. The Motley Fool has a disclosure policy.
Yahoo
26-05-2025
- Business
- Yahoo
Wells Fargo Maintains Overweight Rating on Target (TGT), Cuts PT
On May 22, Wells Fargo lowered its price target on Target Corp. (NYSE:TGT) to $115 from $135 but kept an Overweight rating on the shares. The rating update came after the company reported fiscal Q1 2025 results on May 21. The firm noted that the company had a challenging fiscal Q1 2025 as per expectations, and the share loss was clearly evident. It experienced a 3.8% drop in comparable sales, while comparable store sales underwent a 5.7% decrease. A female customer shopping for beauty products in a modern store. Target Corp. (NYSE:TGT) also cut its fiscal year 2025 guidance. It now estimates a low-single-digit decline in sales and an adjusted EPS of approximately $7.00 to $9.00. This excludes litigation settlement gains in Q1. The company also expects a GAAP EPS of $8.00 to $10.00. Wells Fargo opined that this full-year guidance cut includes a reasonable view that takes tariffs into account. However, it added that there is low visibility on a sustained recovery, and valuation is the primary attraction at the moment for the company. While we acknowledge the potential of TGT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than TGT and that has 100x upside potential, check out our report about the . READ NEXT: and . Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
