Update (9:45 a.m.): Updated with Monday market open information.
The team from Minneapolis has endured a rough year - soft U.S. SSS (worst comp since '09), significant Canadian mishaps, and finally a major credit card data breach announced just 6 days before Christmas '13," Sterne Agee wrote in a research note. "While Canada steals the headlines, Target's U.S. business is the bigger issue with an undifferentiated merchandise offering and declining traffic trends. We'll start Neutral with a $54 PT, awaiting a better entry point and/or a non-fundamental catalyst to ignite shares. Estimates: Q4 $0.81; '13 $3.16; '14 $3.80."
The stock was falling 0.89% to $55.72 shortly after the market opened on Monday.
Must Read: Lock On Target for Retail's Best Bargain
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 number of 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 and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TGT's revenue growth has slightly outpaced the industry average of 2.4%. Since the same quarter one year prior, revenues slightly increased by 1.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.92, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- TARGET CORP's earnings per share declined by 43.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, TARGET CORP increased its bottom line by earning $4.53 versus $4.29 in the prior year. For the next year, the market is expecting a contraction of 30.0% in earnings ($3.17 versus $4.53).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Multiline Retail industry and the overall market on the basis of return on equity, TARGET CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The gross profit margin for TARGET CORP is currently lower than what is desirable, coming in at 29.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.97% trails that of the industry average.
- You can view the full analysis from the report here: TGT Ratings Report