Investors into the U.S. mass-market retailer Target need to have a lot of patience. Today it has reported quarterly profit of $2.41 per share, $0.17 better than consensus estimate of $2.24 and 30% above the previous three-month indication, which came out at $1.85 to send the popular chain's stock price into a tailspin on November 20. Sales has been improved to $30.9 billion, compared to $25.2 on average within the recent three reporting cycles. The expert polls predicted $30.65 billion. All current figures are encouraging, but this hasn't helped yet to form a U-turn point on charts. Instead, Target shares lost another 5% of their market value in the very first hour after the opening bell.

Target has not traded below $115 since November 2023, when it just launched its stratospheric flight above $180. It goes without saying that here I made this hint or reference for a particular reason. Perhaps the markets now believe more in a concept of cautious spending, or an additional retail profit squeezing because of Trump tariffs, or the crowd is maybe just too inertial. I believe in good things, but in a delayed mode. Fast climbing could be repeated, it's just a question of when and where to start it. We will be able to sing "Here Comes the Sun", but a bit later, as Target CEOs shared their inner expectations of comparable sales to be "in a range around flat" in the nearest months. Bloomberg analyst pool hoped for an uptick of 1.7%, as an example.

This coincided with Walmart bellwether warnings for the year, which cited still limited demand for the non-essential categories of goods like electronics and home furnishings, the segment, which is not critical for Walmart but makes up two-thirds of Target’s sales. Besides, prices for seasonal produce such as avocados are going to rise due to 25% tariffs on imports from Mexico, Target’s chief executive officer Brian Cornell told CNBC. Last month’s sales dip and ongoing uncertainty around the consumer spending under persisting borrowing costs, as well as tariffs uncertainty and "the expected timing of certain costs within the fiscal year", pushed Target management to admit "meaningful" year-on-year profit pressures in the current quarter but "relative to the remainder of the year", even though they confirmed "record" performance around Valentines Day. As to apparel sales, it could go higher when warmer weather in the U.S. will appear around Easter holidays (April 20 this year).Target sees its equity per share in the financial year of 2025 within an $8.80-$9.80 range while the analyst pool estimated the average value at $8.70.

All in all, they seem to believe in tomorrow as much as they believed in yesterday, but they don't rely too much on today. It looks like the price could fall even deeper, I wouldn't even rule out double-digit figures for Target shares at some point, but that would be a reason to buy in full. But I also feel it's too early to make those brave steps now.