NEW YORK (TheStreet) -- Shares of Target (TGT) are lower by 0.61% to $76.22 in late morning trading Tuesday, one day ahead of the big box retailer's fourth quarter and fiscal year 2014 earnings release tomorrow morning before the opening bell.
For the fourth quarter, analysts are expecting earnings of $1.46 per share, up from the 90 cents it posted in the same period of last year.
Revenue for the quarter is expected to come in at $21.64 billion, slightly higher than the $21.52 billion Target reported a year earlier.
Exclusive Report:Jim Cramer's Best Stocks for 2015
Last month, CEO Brian Cornell announced the company is closing 133 Canadian stores and laying off more than 17,000 employees. The company said the closing of Target Canada will lead to an increase its earnings in fiscal 2015 and beyond, as well as boost cash flow starting in fiscal 2016.
Also, Target cut its minimum online purchase amount to qualify for free shipping in half to $25 yesterday, in an effort to compete with other rival retailers like Wal-Mart Stores (WMT) and Amazon.com (AMZN) .
Minneapolis, MN-based Target is a retailer that provides differentiated merchandise at discounted prices.
Separately, TheStreet Ratings team rates TARGET CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate TARGET CORP (TGT) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TGT's revenue growth has slightly outpaced the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 2.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.87, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 33.79% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- The net income growth from the same quarter one year ago has exceeded that of the Multiline Retail industry average, but is less than that of the S&P 500. The net income increased by 2.9% when compared to the same quarter one year prior, going from $341.00 million to $351.00 million.
- TARGET CORP's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TARGET CORP reported lower earnings of $3.07 versus $4.53 in the prior year. This year, the market expects an improvement in earnings ($4.16 versus $3.07).
- You can view the full analysis from the report here: TGT Ratings Report