Morgan Stanley Cuts Estimates as Target (TGT) Reports Tough 2Q Comps
- Stocks dip as earnings pour in, consumer discretionary lags
- UPDATE: Alphabet (GOOG) Tops Q3 EPS Views; Revs Strong
- Baker Hughes (BHI), General Electric (GE) in Partnership Talks, Not Merger Talks
- Cirrus Logic, Inc. (CRUS) Q2 Results and Guidance Beat Estimates
- Amazon.com (AMZN) Misses Q3 EPS by 26c, Offers Q4 Guidance
Get the Pulse of the Market with StreetInsider.com's Pulse Picks. Get your Free Trial here.
Morgan Stanley reiterated an Underweight rating on Target (NYSE: TGT), and cut the price target to $64.00 (from $67.00), following the company's 2Q earnings report. TGT reported its second consecutive quarter of underwhelming comps & top-line guide down. Morgan Stanley expects EBITDA margins to contract 100 bps to 9.5% over the next 3 years. TGT's comps have also slowed as other retailers seem to be improving.
Analyst Simeon Gutman commented, "We stay UW TGT believing Q2 results bring the bear case into greater focus. Q2 is the second quarter in a row of comp underperformance and pushes TGT further away from its LT comp goal of 3%. We are skeptical TGT can generate sustainable 3% comps which undermines its 10.5% EBITDA margin goal and the ultimate earnings power/free cash flow of the business. This makes TGT susceptible to negative earnings revisions and valuation derating in the future."
Shares of Target closed at $70.63 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Rosenblatt Upgrades NETGEAR (NTGR) to Buy
- Jefferies Raises Price Target on Planet Fitness (PLNT) Following Solid 3Q
- Needham & Company Reiterates Buy on TTM Technologies (TTMI) Following 3Q
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change
Related EntitiesMorgan Stanley, Earnings
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!