Target Earnings: What To Look For From TGT

General merchandise retailer Target (NYSE:TGT) will be reporting earnings tomorrow morning. Here’s what you need to know.

Target met analysts’ revenue expectations last quarter, reporting revenues of $30.92 billion, down 3.1% year on year. It was a mixed quarter for the company, with a solid beat of analysts’ gross margin estimates but a miss of analysts’ EBITDA estimates.

Is Target a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Target’s revenue to be flat year on year at $24.41 billion, improving from the 3.1% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.67 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Target has missed Wall Street’s revenue estimates four times over the last two years.

Looking at Target’s peers in the non-discretionary retail segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Walmart delivered year-on-year revenue growth of 2.5%, meeting analysts’ expectations, and Sprouts reported revenues up 18.7%, topping estimates by 1.4%. Walmart traded up 1.5% following the results while Sprouts’s stock price was unchanged.

Read our full analysis of Walmart’s results here and Sprouts’s results here.

There has been positive sentiment among investors in the non-discretionary retail segment, with share prices up 19.8% on average over the last month. Target is up 4.5% during the same time and is heading into earnings with an average analyst price target of $117.97 (compared to the current share price of $97.99).

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