Target: The Boom Is Over, But The Bust Is Only Beginning

Oct. 21, 2022 4:19 PM ETTarget Corporation (TGT)15 Comments
Harrison Schwartz profile picture
Harrison Schwartz
13.39K Followers

Summary

  • Real retail sales declined further last month amid weak consumer sentiment, signaling a potentially weak holiday shopping season.
  • As inflation spurs household financial strain, Target appears to be at higher risk as people shift toward cheaper options.
  • Target's high inventory level and low cash position may cause a significant upset in its Q3 and Q4 earnings amid negative economic trends.
  • I believe TGT's value could be cut in half over the coming year as the company's struggles do not appear to be as temporary as many expect.
  • As big box retailers face a shifting landscape, Target's "luxury" branding may become a risk factor.

A Target store in Houston, Texas, USA on March 13, 2022.

JHVEPhoto

Over recent months, economic demand has waned in the US and worldwide. As the cost of living grows, and wages fail to keep up with inflation, many people are slowly reducing discretionary spending. At the same time, many companies are facing increasing input costs as

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This article was written by

Harrison Schwartz profile picture
13.39K Followers
Harrison is a financial analyst who has been writing on Seeking Alpha since 2018 and has closely followed the market for over a decade. He has professional experience in the private equity, real estate, and economic research industry. Harrison also has an academic background in financial econometrics, economic forecasting, and global monetary economics.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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