© Reuters. Citi sees Target (TGT) topping Q1 EPS consensus estimates
Citi analysts reiterated a Buy rating and $177 price target on Target (NYSE:) in a note Monday, stating that they expect the company to top consensus estimates when it reports earnings later this month.
“We are at $1.91 vs consensus of $1.79 and guidance of $1.50-1.90,” the analysts said. “We model 1Q comps -1.0% vs consensus of +0.5% and guidance of down LSD to up LSD. We model net sales -0.4% vs consensus of +1.0%.”
The analysts stated that the firm believes the market is looking for comps +2%, while it models EBIT margin of 5.0% vs consensus of 4.6% and guidance of 4-5%.
“While we are lower than the mkt on sales and slightly lower on GM, we believe they will make it up on SG&A. We expect mgmt to guide 2Q comps to the same broad range as 1Q (-LSD to +LSD) and EPS guidance to bracket consensus (we expect guidance of $1.80-$2.20 vs consensus of $1.97; we are at $2.12E) driven by lower expenses,” the analysts added. “We expect mgmt to reiterate its wide F23 guidance range of $7.75-8.75 vs consensus of $8.45 (and we believe the mkt expects a reiteration).”
They also noted that Target’s web traffic shows, according to Similarweb, that first-quarter trends are slightly better on average than in 4Q22, with the average traffic -6% in 1Q23 vs -10% in 4Q22.
In addition, Placer store traffic data shows first quarter foot traffic trends decelerating to -2.5% from +0.3% in 4Q22, with the data “proven to be a strong indicator of TGT sales.”
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