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- Retailers to Watch Closely in August: Target
Retailers to Watch Closely in August: Target
The opening price of Target Corporation (TGT) soared by 7%, from $125 to $133.80 on August 16. More gains are expected during the last two weeks of summer, as the seven-largest American retailer posted a surprising profit rebound. Target said its record Q2 2023 EPS is reflecting the progress in paring back the bloated inventories, which forced large discounts a year ago. Yet, the profit exceeded consensus by more than 22%, as most of the expert community expected at least some cooling of the company's recovery.
Even a couple percent of total sales decline, which marked the second quarter of slip in a row, as well as a foreseen cut to Target's own annual profit forecast, did not stop the investing crowd from some agitated buying of Target stocks. Yet, the risks may grow in the mid-term, as the stock is treading water in the vicinity of its 13-month lows, and its current price rebound has partially offset its loses before the news. The market appreciated Target’s ability to improve against a slump in discretionary-goods purchases, but most consumers are still spending money on essentials in discount stores like Walmart, which closed the last week at its ever-highest and is going to report on August 17.
Headwinds may prevent Target price from further recovery at any moment, so that a clear breakthrough above $150 per share is necessary for a strategically upside trading decision.
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