Earnings Reports to Watch: Target (TGT)
Target Corporation (NYSE:TGT) will be the last real shot the ailing consumer discretionary sector has to reverse what’s currently a slight year-over-year earnings decline. To pull that off, the “affordable upscale” big box chain will need to deliver better than $1.17 a share on Wednesday morning.
The last time Wall Street models admitted that possibility was back in February, when the retail future looked bright and TGT was a $65 stock. Since then, targets have moved all over the place but most of the analysts have shifted from looking at the company as a growth play to trying to gauge whether earnings have deteriorated 3%, 5% or a full 20% from last year.
At this point, I think sentiment is so defensive it would take a miracle to turn TGT around. If we get it, the pressure is off Wal-Mart Stores Inc (NYSE:WMT) on Thursday. Otherwise, the domestic retail door could be closing until the next quarterly cycle gives these stocks another chance to turn around.