Target Q1 earnings preview: What to expect out from retailer

Bullseye! The red-and-white themed retailer Target (TGT) is set to report first-quarter earnings tomorrow morning — Wednesday, May 22 — ahead of the market open, aiming for revenue of $24.13 billion and earnings of $2.05 per share according to analyst estimates.

Yahoo Finance's Josh Lipton lays out Wall Street sentiments around the retail stock, various tailwinds such as recent inventory re-pricing, and how Target holds up to the likes of Walmart (WMT).

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Luke Carberry Mogan.

Video Transcript

Wednesday, everyone target will release its latest earnings report here with what you the consumer should know is our own, Josh Lipton.

Hey Josh Brad.

Target earnings are indeed on tap for the first quarter.

Analysts are expecting earnings per share of 205 on revenue of $24.13 billion.

Now, that would represent a drop year over year of about 3.3% heading into their support.

The stock is up about 10% this year.

Among financial analysts opinion fairly divided on Wall Street, 20 buys, 15 holds and one sell companies now trying to bounce back after last year's performance when annual revenue declined for the first time in seven years.

But target we know has a game plan to boost shopper traffic and profit.

It's really a three pronged strategy here, upgrading existing stores as well as plans to open more than 300 new stores.

A paid membership program called Target Circle 360 expanding its own higher margin private brands which represent roughly 30% of its business now and more immediately just this week, target announced it was cutting prices on 5000 items this summer.

That includes 1500 items getting price cuts right away.

I spoke to D A Davidson's Mike Baker.

Now he has a buy rating on target.

Yes, he says company had a challenging 2023 but he sees better times ahead tomorrow.

He thinks the cop is gonna say that Q one comparable sales were those from stores and online channels were down about 3%.

But Baker bets that this will be the last quarter of negative comps and looking ahead, he thinks the company's margins are going to get back to historical norms.

Meaning in that 6% range.

In part, that's because Target he says is getting more efficient when it comes to online delivery.

Now, Target does have big competition, of course, including Walmart which reported earnings last week.

If you are an investor, can you be a fan of both names?

Baker says yes, because these companies represent two different investment ideas.

Walmart, he argues is a best of breed company that is simply firing on all cylinders right now.

Target, he says is a turnaround story and one that he believes is gonna work Brad back to you.

All right.

Tons to track in the retail landscape this week.

Josh, thanks so much for teeing up Target for us.

The brand of the bull's eye.