Granted, Target hasn’t been popular among investors. After all, the stock collapsed on an earnings miss. EPS came at $2.19, which was short of expectations. Revenue came at…
$25.17 billion. Analysts were expecting sales to come in at around $24.49 billion.
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“Throughout the quarter, we faced unexpectedly high costs, driven by several factors, resulting in profitability that came in well below our expectations, and where we expect to operate over time,” Target Chief Executive Brian Cornell added.
It’s why the TGT stock plummeted from about $207 to a low of $140.
But the pullback has become overkill, creating a solid opportunity.
Other analysts, such as Wells Fargo’s Edward Kelly, are just as bullish.
Kelly just upgraded TGT stock to overweight from equal weight, with a new price target of $195 a share. Even with negatives, the analyst says the sell-off is overdone, creating “the opportunity to pick up a proven share gainer into an underappreciated earnings recovery at the right price,” as quoted by Barron’s.
The back-to-school season could make the stock even more attractive.
According to K12dive.com, “A 2022 back to school survey from consulting services firm Deloitte shows concerns about inflation are not stopping parents from spending more than last year to get their children ready for the new school year. Although 57% of parents are concerned about inflation’s impact on the cost of school products, 37% plan to spend more than they did last year, the survey found. Deloitte estimates this will result in an 8% annual increase in back-to-school spending, which calculates to $661 per child versus $612 in 2021.”
Target also has a strong history of running during the back-to-school season.
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In 2019, for example, TGT ran from about $80 to about $106. In 2020, TGT ran from $118 to $134. In 2021, it ran from about $237 to $263. And while the U.S. economy isn’t…
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