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Market Preview: Pressed for Time

As for Thursday's scheduled news, Target (TGT - Get Report) is slated to report its third-quarter results before the opening bell, and the average estimate of analysts polled by Thomson Reuters for a profit of 77 cents a share in the October-ended period on revenue of $16.92 billion.

Shares of the Minneapolis-based retailer closed Wedneday at $61.38, up nearly 20% so far in 2012. JPMorgan sees more upside from here though. The firm upgraded Target to overweight on Monday and lifted its price target to $76 from $66.

"[W]e believe the stock is positioned for outperformance in 2013 based on accelerating earnings growth over the next two years against reasonable valuation with specific catalysts," the firm said. "We cite the following reasons: (1) easy Holiday comparisons with specific merchandising catalysts (Neiman, Nate, and Threshold); (2) accelerating sales, earnings, cash flow, and buyback growth in 2013-2014 related to Canada/leverage; (3) a derivative housing play with nearly 20% of sales in this category; and (4) valuation levels that support reasonable downside protection."

Overall, the sell side is mostly optimistic with 15 of the 23 analysts covering Target at either strong buy (5) or buy (10) with the 12-month median price target sitting at $71.

Also reporting before the open is Target rival Wal-Mart Stores (WMT - Get Report), the world's largest retailer. Wall Street is expecting earnings of $1.07 a share on revenue of $115 billion from the Bentonville, Ark.-based behemoth, which has topped the consensus view in six of the past eight quarters.

Meantime, Dell (DELL) is the big name after Thursday's closing bell with analysts expecting a profit of 40 cents a share in the PC maker's third quarter on revenue of $13.89 billion.

Sterne Agee previewed the numbers on Tuesday, and while it's not expecting a Cisco-like blowout performance, the firm sees some potential for a bounce in Dell's stock, which is down nearly 35% in 2012.

"Our supply chain checks unsurprisingly indicate that its core PC business remains under pressure from a tough macro and cannibalization from iOS and Android," the firm said. "However, given low expectations, we expect results to be in-line or better. For its outlook, it is a similar story with low expectations. Because of this, we would not be surprised to see a near-term rally in DELL shares though our longer-term concerns remain."

UBS weighed in as well, saying it expects the PC business to get worse before it gets better. The firm has a neutral rating on Dell with a $10 price target.

"We expect Dell to face pressure from tablet cannibalization, a cautious Windows 8 transition, and softening IT budgets," UBS said, adding later: "Dell's expense ratio probably will deteriorate from last year given revenue weakness."

Check out TheStreet's quote page for Dell for year-to-date share performance, analyst ratings, earnings estimates and much more.
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NTAP $22.35 -1.28%
TXN $50.90 2.04%
TGT $70.00 0.63%
YHOO $27.05 -3.29%
WMT $66.90 -0.15%


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