Earnings Preview: Target Reports Q2 Results August 15

Aug. 9.12 | About: Target Corporation (TGT)

Target Corp. (NYSE:TGT) is scheduled to report its Q2 2012 results on August 15, 2012, before the market opens. The street expects EPS and revenue of $1.01 and $16.76B, respectively.

In this article I will recap the historical results of the company, its latest EPS estimates vs. surprises, the latest news from TGT and the news from its closest competitors.

Target Corp. Revenue and Net Income History

Recent EPS Actuals vs. Estimates

In the last four quarters TGT has beaten analysts' estimates. In the last quarter it reported $1.04 EPS, above analyst estimates of $1.01.

Target Corp. EPS Historical Results vs Estimates

The consensus EPS estimate is $1.01 based on 22 analysts' estimates, down from $1.03 a year ago. Revenue estimates are $16.76B, up from $16.24B a year ago. The median target price by analysts for the stock is $65.00.

Average recommendation: Overweight

Source: Marketwatch

Analyst Upgrades and Downgrades

  • On August 6, 2012, UBS reiterated Buy rating for the company and moved up the target price to $71.
  • On February 28, 2012, Standpoint Research downgraded the company from Buy to Hold.

Latest News

  • On July 5, 2012, Target Corp. announced that combined with the outlook for July, the Company is on-track to deliver second quarter sales and adjusted earnings per share (NYSEARCA:EPS) in line with the guidance provided at the time of first quarter earnings release.
  • On June 13, 2012, Target Corp. announced that its Board of Directors has declared a quarterly dividend of $0.36 per common share. The dividend is payable September 10, 2012 to shareholders of record at the close of business August 15, 2012.
  • On May 16, 2012, Target Corp. announced that for the second quarter of 2012, it expects adjusted EPS of $1.04 to $1.14 and GAAP EPS of $0.94 to $1.04. For fiscal 2012, the Company has raised its guidance by 5 cents and now expects adjusted EPS of $4.60 to $4.80 and GAAP EPS of $4.10 to $4.30. According to I/B/E/S Estimates, analysts were expecting the Company to report EPS of $1.00 for the second quarter of 2012; EPS of $4.29 for fiscal 2012.
  • On April 5, 2012, Target Corp. updated first quarter 2012 guidance and expects adjusted earnings per share in the range of $1.04 to $1.10, compared with prior guidance of $0.97 to $1.07. The company expects GAAP EPS of $0.96 to $1.02, compared with prior guidance of $0.88 to $0.98. According to I/B/E/S Estimates, analysts were expecting the Company to report EPS of $1.03 for fiscal 2012.
  • On March 19, 2012, Target Corporation announced that, as expected, it has completed the $10 billion share repurchase program authorized by its board of directors in November 2007.
  • On March 15, 2012, Target Corp. announced that it has declared a quarterly dividend of 0.30 per common share. The dividend is payable June 10, 2012 to shareholders of record at the close of business May 16, 2012.
  • On February 23, 2012, Target Corp. announced that for first quarter of 2012, it expects adjusted earnings per share in the range of $0.97 to $1.07 and GAAP EPS of $0.88 to $0.98. The 9 cent difference between these two ranges represents the EPS impact in the quarter of the expected expenses related to the Canadian market entry.

Competitors

Dollar General Corporation (NYSE:DG), Dollar Tree (NASDAQ:DLTR), J.C. Penney Company (NYSE:JCP), Macy's (NYSE:M), and Wal-Mart (NYSE:WMT) are considered major competitors for Target, and the table below provides the key metrics for these companies and the industry.

Target Corp. key ratio comparison with direct competitors

The chart below compares the stock price changes as a percentage for the selected companies for the last one year period.

TGT Chart

TGT data by YCharts

Competitors' Latest Development

  • On August 8, 2012, Macy's Inc raised earnings guidance for fiscal 2012 to a range of $3.30 to $3.35 per diluted share, compared with previous guidance for earnings per diluted share of $3.25 to $3.30. Guidance for same-store sales in fiscal 2012 remains unchanged at an increase of approximately 3.7%. According to I/B/E/S Estimates, analysts were expecting the Company to report EPS of $3.36 for fiscal 2012.
  • On July 23, 2012, Reuters reported that J.C. Penney Co Inc raised $248 million by selling part of its stake in a Simon Property Group Inc unit.
  • On July 10, 2012, Reuters reported that J.C. Penney Co Inc announced another 350 job cuts at its Plano, Texas headquarters, completing a reorganization of its home office designed to help it bring costs in line with those of rivals.
  • On July 5, 2012, Macy's Inc reaffirmed fiscal 2012 guidance and expects same store sales to rise by approximately 3.7%, with earnings per diluted share in the range of $3.25 to $3.30. According to I/B/E/S Estimates, analysts were expecting the Company to report EPS of $3.37 for fiscal 2012.
  • On June 28, 2012, Dollar General Corp. announced the pricing of an offering of $500 million of its 4.125% Senior Notes due 2017. The Notes, which are fully and unconditionally guaranteed on a senior unsecured basis by each domestic subsidiary of Dollar General that guarantees its senior secured credit facilities, will pay interest at a rate of 4.125% per annum semi-annually on January 15 and July 15 of each year, commencing January 15, 2013.
  • On June 12, 2012, The Economic Times reported that Wal-Mart Stores, Inc. plans to snap ties with companies that supply products to its stores if they are involved in any kind of corrupt practices, making it the first retail company to undertake such a stringent initiative in India.
  • On June 11, 2012, Reuters reported that New York City's pension funds became the latest group to file a derivative lawsuit against Wal-Mart Stores Inc based on reported allegations of bribery in Mexico and a possible cover-up by Wal-Mart officials.
  • On June 4, 2012, Dollar General Corp. announced that it continues to expect total sales for fiscal 2012 to increase 8% to 9% over the 53 week fiscal 2011, or 10% to 11% on a comparable 52-week basis.
  • On May 18, 2012, Macy's Inc announced that it declared a regular quarterly dividend of $0.20 per share on Macy's common stock, payable July 2, 2012, to shareholders of record at the close of business on June 15, 2012.
  • On May 17, 2012, Dollar Tree, Inc. announced that for the second quarter of 2012, it expects sales to be in the range of $1.66 billion to $1.70 billion, based on low to mid single digit positive comparable store sales and diluted earnings per share to be in the range of $0.87 to $0.93. For fiscal 2012, it expects sales to be in the range of $7.33 billion to $7.46 billion, based on a range of low to mid single digit positive comparable store sales and diluted earnings per share to be $4.74 to $4.94.
  • On May 17, 2012, Wal-Mart Stores Inc announced that for second quarter of 2013, it expects diluted earnings per share from continuing operations to range between $1.13 and $1.18. According to I/B/E/S Estimates, analysts are expecting the Company to report EPS of $1.16 for second quarter of 2013.
  • On May 15, 2012, J.C. Penney Company Inc reaffirmed fiscal 2012 earnings guidance and expects earnings per share of $2.16 per share which excludes non-cash qualified pension expense, restructuring charges and markdown reserves as the Company transition merchandise assortment.

Technical Overview


The stock has a market capitalization of $41.62B and is currently trading at $62.94 with a 52 week range of $46.77 - $63.00. The stock's year-to-date performance has been 24.26%. It is currently trading above its 20-, 50- and 200-day SMAs.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.