Earnings Preview: Target Corp.

Target Corp. (TGT) is expected to report Q3 earnings before the market open on Tuesday, November 17 with a conference call scheduled for 10 am ET.

Guidance

Analysts are looking for a profit of 50c on revenue of $15.25B. The consensus range is 45c-59c for EPS, and revenue of $15.08B-$15.31B, according to First Call. Target's September and October same-store sales were not as bad as expected, with September SSS down 1.7% and October SSS down 0.1%. On October 8, the company said Q3 EPS would exceed the First Call estimate, which was 43c at the time. At the same time, CEO Gregg Steinhafel said the company remains cautious on expectations for Q4. Wal-Mart (WMT) recently opened a new front in the online holiday price wars, extending discounts to popular DVDs, the Wall Street Journal reported on November 6; Target and rival Amazon (AMZN) countered, matching the new prices, but Wal-Mart then cut their price again. Target, which said it remains committed to Target India, recently selected RadioShack (RSH) to run its mobile phone operations in its stores, the Twin Cities Business Journal reported on November 2.

Analyst Views

Target was recently upgraded to Buy from Sell at Citigroup, as the firm sees significant earnings upside as SSS improve. The analyst said Target has a "long runway" of productivity improvements ahead and said the stock is likely to get a profit boost with a greater focus on food through its "P-Fresh" format. Additionally, the analyst said Target has lower apparel inventory levels and improved fashion offerings. Management is expected to comment on the upcoming holiday season.