Why Target (TGT) Stock Is Gaining Today

NEW YORK (TheStreet) -- Target (TGT) shares are up 0.9% to $58.21 on Monday following reports that the company was extending weekday store hours to midnight at more than half of its American stores, according to the Wall Street Journal.

The retailer's decision to extend store hours may be a response to flagging sales and recent bad press related to the biggest data breach in U.S. history in which 40 million credit card numbers were stolen from the company's computer system.

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Target has been cutting prices in an effort to regain customers lost to competitors like smaller stores and online retail.

The extended hours will begin this month and continue through the holiday season at which point the success of the program will be evaluated.

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 5.7%. 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 ($3.47 versus $3.07).
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Multiline Retail industry average. 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 16.14% 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.
  • You can view the full analysis from the report here: TGT Ratings Report
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