Target should post healthy 2007 same store sales growth on improving margins, aided by refinements to its electronics, apparel and home furnishings offerings, with a continued focus on value.
Further, Target's new store opening timetable remains on-schedule, with the company planning to open 100 new stores in F2008, including 30 SuperTarget stores; each should help overall revenue, although investors should keep in mind that these stores are not counted in same store sales revenue statistics. Target's shares closed Friday up 83 cents to $53.93.
In addition, Target's marketing campaign seems to be registering better with upper-middle-income shoppers, who appear to be increasingly seeking better values. The Reuters F2008/F2009 EPS consensus estimates for TGT are $3.56 to $4.06.
The qualifiers? Many analysts remained concerned about a cutback in discretionary spending by consumers in the critical Q4 shopping season, prompted by high energy prices and uneasiness regarding the health of the U.S. economy in the immediate quarters ahead. Given the U.S. economy's 3.9% GDP growth in Q3, the former appears to be the larger concern, but so long as energy prices do not spike higher, TGT's operation strategy remains appropriate, as do TGT's shares. So look for Target to be true-to-form this fall.
The First Call mean rating for TGT is: Buy. [12 firms.] Mean 2007 target price for TGT: $72.00. [high: $80, low: $64.50.]
Stock Analysis: Target is a moderate-risk stock not suitable for low-risk investors. Consider adding TGT to your portfolio if you can tolerate moderate risk and don't already own a U.S. retail stock. Investors with an investment horizon longer than 1 year should be rewarded from TGT's shares. Sell / Stop Loss: $43.
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Reader Comments (Page 1 of 1)
11-09-2007 @ 6:04PM
larry kelley said...
hello & let me put my two cents in, or centablos. i am ashamed of my fellow americans who go out & look for the [WALMART] deal, when they are the ones who are messing up this country. i am so sick of big corp. taking my money & giving it to china for the most part, when are we going to wake up & smell the roses, when everyone is imported to china & start working for them. i try to buy us products, but like everyone else what are we to do? please pass this one on. thanks