Wells Fargo Upgrades Target (TGT) to Outperform; Canada Dilution is Peaking
Tweet Send to a Friend
Get Alerts TGT Hot Sheet
Price: $69.72 +1.53%
Rating Summary:
11 Buy, 11 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Rating Summary:
11 Buy, 11 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Trade TGT Now!
Wells Fargo upgraded Target (NYSE: TGT) from Market Perform to Outperform and raised its valuation range to $73.00 to $78.00 from $61.00 to $65.00.
The firm cited: "(1) Canada dilution is peaking, and operating metrics should improve optically starting in Q2 2013. For example, we estimate earnings growth will go from -7.3% in Q1 2013 to roughly flat in Q2 2013 to +13.2% in Q3 2013. (2) The PFresh grocery remodel program and the 5% REDcard rewards program enhance frequency and customer loyalty, and are still providing a meaningful comp tailwind and built-in growth (we estimate together these initiatives will continue to drive approximately 300bp in comps in 2013, 160bp in 2014, and 140bp in 2015). (3) Target appears to be making a more aggressive push in eCommerce and omni channel given its recent external senior hire from Gilt Groupe (also previously at Amazon), and plans to significantly increase IT related capex this year. We estimate online sales drove 50-70% of the 0.4% comp in Q4. (4) Target is a relatively defensive play in retail given its increasing exposure to consumables (household essentials and food/pet supplies made up 44% of revenue in 2011, up from 32% in 2006) and exposure to the housing recovery (home furnishings/décor and hardlines made up 37% of revenue in 2011)."
For an analyst ratings summary and ratings history on Target click here. For more ratings news on Target click here.
Shares of Target closed at $62.96 yesterday, with a 52 week range of $54.68-$65.80.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
The firm cited: "(1) Canada dilution is peaking, and operating metrics should improve optically starting in Q2 2013. For example, we estimate earnings growth will go from -7.3% in Q1 2013 to roughly flat in Q2 2013 to +13.2% in Q3 2013. (2) The PFresh grocery remodel program and the 5% REDcard rewards program enhance frequency and customer loyalty, and are still providing a meaningful comp tailwind and built-in growth (we estimate together these initiatives will continue to drive approximately 300bp in comps in 2013, 160bp in 2014, and 140bp in 2015). (3) Target appears to be making a more aggressive push in eCommerce and omni channel given its recent external senior hire from Gilt Groupe (also previously at Amazon), and plans to significantly increase IT related capex this year. We estimate online sales drove 50-70% of the 0.4% comp in Q4. (4) Target is a relatively defensive play in retail given its increasing exposure to consumables (household essentials and food/pet supplies made up 44% of revenue in 2011, up from 32% in 2006) and exposure to the housing recovery (home furnishings/décor and hardlines made up 37% of revenue in 2011)."
For an analyst ratings summary and ratings history on Target click here. For more ratings news on Target click here.
Shares of Target closed at $62.96 yesterday, with a 52 week range of $54.68-$65.80.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
You May Also Be Interested In
- UPDATE: A.G. Lafley Gives Procter & Gamble (PG) Investors 'New Hope', UBS Upgrades to Buy
- Hewlett-Packard (HPQ) Q2 Performance Wins Praise on Wall Street; Jefferies Raises to Hold
- Janney Montgomery Scott Upgrades Wendy's (WEN) to Buy
Create E-mail Alert Related Categories
Analyst PT Change, Hot Upgrades, UpgradesRelated Entities
Earnings, Wells Fargo
Login with Facebook
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!
