Target's FY 2024 Guidance Seen as 'Reasonable' by Stifel Nicolaus Analyst

Stifel Nicolaus's Mark Astrachan raised their price target on Target (NYSE: TGT) by 15.7% from $153 to $177 on 2024/03/06. The analyst maintained their Hold rating on the stock.

Astrachan's price target update was catalyzed by a review of Target's Q4 and FY 2023 earnings, reported on 2024/03/05. The analyst told investors that Stifel Nicolaus hiked its FY 2024 and FY 2025 post-print, seeing the higher-end of management's 0% to 2% FY 2024 comp growth guidance as "reasonable."

Target's Q4 2023 earnings exceeded expectations. The company reported an EPS of $2.98, beating the Zacks Consensus Estimate of $2.41 and Q4 2022's $1.89 by 57.7%. Revenue for the quarter came in at $31.92 billion, surpassing the Zacks Consensus Estimate of $31.84 billion and Q4 2022's $31.4 billion by 1.7%. However, the company experienced a comparable sales change of (4.4)%, compared to a 0.7% change in Q4 2022.

For FY 2023, Target reported an EPS of $8.94, representing a 48.5% increase from FY 2022's $6.02. Comparable sales for the year declined by 3.7%, compared to a 2.2% increase in FY 2022.

Looking ahead, Target's management provided guidance for Q1 2024 and FY 2024. For Q1 2024, the company expects an EPS of $1.70 to $2.10, compared to $2.05 in Q1 2023. They also anticipate a comparable sales decline of 3% to 5%. For the full year, Target projects an EPS of $8.60 to $9.60 and flat to 2% growth in comparable sales.

Chairman & CEO Brian Cornell expressed optimism about the company's future, stating, "Our team's efforts changed the momentum of our business, further improving our sales and traffic trends in Q4 while driving profitability well ahead of expectation." He also highlighted the company's ongoing investments in strengths and differentiators, including the rollout of the new Target Circle membership program.

In addition to Stifel Nicolaus's Mark Astrachan, other analysts also updated their price targets for Target on 2024/03/06. Citigroup's Paul Lejuez raised their price target by 26.8% from $142 to $180, while JP Morgan's Christopher Horvers raised theirs by 14.6% from $157 to $180. Evercore ISI Group's Greg Melich increased their price target by 9.1% from $165 to $180. All three analysts maintained their Hold rating on the stock.

According to data, 58.8% of top-rated analysts currently rate TGT as a Strong Buy or Buy, while 41.2% consider it a Hold. No analysts recommend or strongly recommend selling the stock.

The consensus forecast among analysts is that TGT's upcoming year will deliver earnings per share (EPS) of $10.73. If the analysts' predictions hold true, TGT's next yearly EPS will represent a 36.1% increase on a year-over-year basis.

Since Target's latest quarterly report on 2024/03/05, the stock price has increased by 1.8%. Year-over-year, the stock has risen by 5.4%. However, during this period, Target has trailed the S&P 500, which has experienced a 29.4% increase.

Mark Astrachan, the Stifel Nicolaus analyst who raised the price target, is ranked in the top 3% out of 4,493 Wall Street analysts according to WallStreetZen. With an average return of 26.1% and a 76.7% win rate, Astrachan specializes in the Basic Materials, Consumer Cyclical, and Consumer Defensive sectors.

Target Corporation, headquartered in Minneapolis, MN, is a general merchandise retailer in the U.S. The company offers a wide range of products, including food, apparel, accessories, home décor, electronics, toys, and more. Target also provides in-store amenities such as Target Café, Target Optical, and Starbucks. As of 2202/03/09, Target operates 2,000 stores.

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