Target Stock Price Trades Higher After Earnings Beat, Revenue Miss

Shares of Target are trading slightly higher in premarket trading after the company reported higher-than-expected earnings for the fourth quarter, but missed the revenue expectations.

Fundamental analysis: E-commerce business expanded

Target reported adjusted earnings of $1.69 per share, higher than $1.65 per share expected by the market analysts, mainly on the back of higher sales in stores that have been open at least a year.

Revenue rose 1.8% to $23.40 billion, but misses estimates of $23.50 billion. Net income grew 4.2% to $834 million from $799 million a year earlier.

E-commerce business has continued to grow, but at a slower pace than in the third quarter with a growth of 20% compared to 31% in the previous quarter.

As for this year, Target said it expects adjusted earnings per share to come between $6.70 to $7.00, with the midpoint of $6.85 coming in slightly lower than analysts’ estimates of $6.87.

Technical analysis: Shares in the recovery mode

Target stock price suffered last week when it lost nearly 12%. Previously, shares of the company hit a record high of $130.24 in December. Yesterday, the stock price opened the week positively to gain nearly 6% and recover a portion of its losses.

The price action tested the key short-term support around the $105 mark, and so far the bulls have resisted the attempts to break this level.

In case of a deeper pullback, the stock price is expected to test the key mid-term support near the $90 handle. This zone is likely to also offer a solid opportunity for those investors looking to buy Target stock.

This week’s resistance is located at $117.50, in the context of the 100-DMA.

Summary

Shares of Target are trading slightly higher today after the company posted mixed fourth-quarter earnings. The stock price fell nearly 12% last week, just to recover almost half of those losses yesterday.