Target (TGT) Is Today's Pre-Market Laggard Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Target ( TGT) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Target as such a stock due to the following factors:

  • TGT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $249.1 million.
  • TGT traded 11,893 shares today in the pre-market hours as of 8:03 AM.
  • TGT is down 3.8% today from Friday's close.

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More details on TGT:

Target Corporation operates general merchandise stores in the United States and Canada. The stock currently has a dividend yield of 3.5%. TGT has a PE ratio of 20.1. Currently there are 5 analysts that rate Target a buy, 4 analysts rate it a sell, and 12 rate it a hold.

The average volume for Target has been 5.5 million shares per day over the past 30 days. Target has a market cap of $37.8 billion and is part of the services sector and retail industry. The stock has a beta of 0.77 and a short float of 4.3% with 8.14 days to cover. Shares are down 5.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Target as a buy. 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 ratings report include:
  • TGT's revenue growth has slightly outpaced the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 2.0%. 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 0.85, 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 14.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over 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 ($3.66 versus $3.07).
  • The change in net income 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 has decreased by 16.1% when compared to the same quarter one year ago, dropping from $498.00 million to $418.00 million.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, TGT has underperformed the S&P 500 Index, declining 16.37% from its price level of one year ago. Despite the decline in its share price over the last year, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry. We feel, however, that other strengths this company displays compensate for this.

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