Target shares remain in a bull market supported by Q4 results

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Mar 13, 2021
  • Target reported better than expected Q4 earnings this March
  • Guggenheim raised its price target to $200 on Target
  • If the price jumps above $190, the next target could be around $200

Target (NYSE: TGT) shares continue to trade in a bull market, and everything indicates that the price could advance soon above $190 resistance if the US stock market doesn’t enter a correction phase. Wall Street remains bullish on this retailer as it sees Target well-positioned for success in 2021 and, more importantly, beyond.

Fundamental analysis: Guggenheim raised its price target to $200 on Target

Target Corporation is the 8th-largest retailer in the United States that operates in more than 1,844 stores across the country. The company continues to improve its position on the market, and if you are looking for a solid growing dividend income and good total return potential, shares of this company are not a bad choice.

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Target reported Q4 results this March; total revenue has increased by 21.1% Y/Y to $28.34B while Q4 GAAP EPS was $2.73 (beats by $0.29). Total revenue has increased above expectations (beats by $920M), and it is important to say that comparable digital sales grew 118%.

Comparable sales increased by 20.5% in Q4, while the gross margin came in at 26.8% of sales. The company’s business has proven resilient throughout the pandemic, but Target did not provide sales and EPS guidance for FY2021 due to continued uncertainty.

“With the strength of our unique, multi-category assortment and the flexibility we offer through our reliable and convenient fulfillment options, we gained nearly $9 billion in market share in 2020 and grew our revenue by $15 billion, which is more than the 11 prior years combined. As we look ahead to 2021 and beyond, we see continued opportunity to invest in our business and our team, building on the strong foundation we’ve established to drive market share gains and deliver profitable growth for years to come,” said Brian Cornell, board chairman and CEO of Target Corp.

Target declared a $0.68/quarterly share dividend last week (in line with previous) and announced that it would continue to focus on strong sales trends in 2021. Guggenheim raised its price target to $200 on Target after the Q4 earnings report as it sees this retailer well-positioned for success in 2021 and, more importantly, beyond.

Technical analysis: $190 represents the first resistance level

Technically looking, Target shares could advance above the $190 resistance level this March, while the first sign of the trend reversal could be if the price falls below the $160 support.

Data source: tradingview.com

If the price jumps above $190, it would be a signal to trade shares, and the next target could be around $200, but if the price falls below the $170 support level, it would be a firm “sell” signal.

Summary

Target continues to improve its position on the market, and the company reported better than expected Q4 earnings this March. Digital comparable sales grew 118% in Q4, and Guggenheim raised its price target to $200 on Target after the Q4 earnings report. If the price jumps above $190, the next target could be around $200, while the first sign of the trend reversal could be if the price falls below the $160 support.

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