Target Slashes Estimates

The stock market is just about perfectly flat this morning. The market has done very well lately and traders are waiting for the Fed minutes which are due to be released at 2 pm today. The general view is that QE is on a very definite track and will be wrapped up later this year. The move in interest rates, however, is still up in the air. Perhaps there will be more signs in these minutes.

I’ve been keeping a close eye on Target (TGT), the big box retailer. It’s been an excellent company until having an awful year in 2013. The retailer botched its expansion into Canada, and their credit card data was breached. The shares fell from $73 to $55, but despite the low price, I’ve still shied away.

This morning, Target announced earnings of 78 cents per share for its second quarter which was a penny below estimates. They also cut their full-year range from $3.60 to $3.90 per share down to $3.10 to $3.30 per share. That means the stock currently goes for more than 18 times the top-end of their expectations. That’s no bargain.

Ross Stores (ROST) is due to report tomorrow. The shares got a big lift yesterday when the stock rallied 4%. The company expects earnings between $1.05 and $1.09 per share. I’ll be curious to see if they update their full-year forecast of $4.09 to $4.31 per share.

Posted by on August 20th, 2014 at 10:46 am


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