Will Target (TGT) Disappoint on Earnings? - Analyst Blog


Target Corp. ( TGT ) is slated to report third-quarter fiscal 2013 results on Nov 21, 2013. Last quarter it posted a positive surprise of 22.7%. Let us see how things are shaping up for this announcement.

Growth Factors in the Past Quarter

Target Corp's second-quarter bottom-line results reflected disciplined cost management and effective execution of strategy, offset by lower-than-anticipated U.S. comparable-store sales. Target Corp's efficient marketing, multi-channel strategy, product innovation, compelling pricing strategy and new merchandise assortments were the driving factors.

Earnings Whispers?

Our proven model does not conclusively show that Target Corp is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Negative Zacks ESP: ESP for Target Corp is -1.61%. This is because the Most Accurate Estimate stands at 61 cents and the Zacks Consensus Estimate stands at 62 cents.

Zacks Rank #3 (Hold): Target Corp's Zacks Rank #3 (Hold) lowers the predictive power of ESP because this Zacks Rank when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with Zacks #4 and #5 Ranks (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat: 

  • Five Below, Inc. ( FIVE ) with Earnings ESP of 25.0% and Zacks #2 Rank (Buy)
  • The Kroger Co. ( KR ) with Earnings ESP of 1.89%and Zacks #2 Rank (Buy)
  • Dollar Tree, Inc. ( DLTR ) with Earnings ESP of 1.67% and Zacks #2 Rank (Buy)

DOLLAR TREE INC (DLTR): Free Stock Analysis Report

FIVE BELOW INC (FIVE): Free Stock Analysis Report

KROGER CO (KR): Free Stock Analysis Report

TARGET CORP (TGT): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: DLTR , FIVE , KR , TGT



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