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In the last month, shares of Target (TGT) - Get Free Report are down nearly 13%. Last week, Target preannounced disappointing fourth-quarter holiday sales and gave lower guidance for fiscal 2017. Investors were surprised by the results, especially considering the company put up a decent third quarter. Target will report its full results on Feb. 28.

Target said holiday same-store sales for November and December would be down 1.3% and lowered its adjusted earnings-per-share forecast. Analysts were looking for flat comps.

Management told analysts it anticipates earnings to be between $1.45 and $1.55 per share. Previously the company told analysts it expected $1.55 to $1.75 per share. Everybody raced to cut estimates. The consensus now stands at $1.51 and $20.7 billion in revenue.

E-commerce sales were up 30%, but when you strip out e-commerce sales, same-store sales were actually down 3%. That's brutal. It must have been really easy to get a parking spot at Target during the holidays!

Commentary around the company's signature categories -- style, home, baby, kids and wellness -- was encouraging, but ultimately the company's merchandising and store improvements didn't help all that much.

Target reported third-quarter results on Nov. 15. Earnings were 21 cents better than expected, driven by gross margin expansion and selling, general and administrative leverage. Target's signature categories posted comps in the low single digits.

Analysts felt the company was well positioned going into the fourth quarter. Target had more than 1,000 stores ready for digital ordering and in-store pick up, vs. 460 stores last year. The company was about to deploy the "Wondershop," a seasonal store with more than 700 new holiday items. The signature categories were ready. Target was even giving away a $5 gift card when customers received a flu shot at the in-store CVS (CVS) - Get Free Report pharmacy vs. no gift card the year before.

Unfortunately, nothing seemed to work in the fourth quarter. Valuationwise, the company is selling at a discount. Analysts are expecting full-year earnings of $5.06 per share on $69.6 billion in revenue. At the current quote, the stock is trading at just 13 times estimates. Usually Target trades between 16 and 17 times estimates.

If the company can find a way to generate some investor enthusiasm for the shares, the stock could trade into the low $80s. But right now, it's hard to see how management can get investors excited about giving the company a higher valuation.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.