Piper Jaffray Maintains “Overweight” Rating on Target (TGT)
Analysts at Piper Jaffray reiterated on Monday their “Overweight” rating on Target Corporation (TGT) despite an expectation of poor holiday sales for the discount retailer.
The analysts see share of TGT reaching $71, a +21.2% upside to Friday’s closing price of $58.57.
Piper Jaffray noted, “We expect December same-store sales in the flat to +2% range reflecting a challenging holiday season across retail, continued share loss to online competitors and a Target + Neiman Marcus collection that did not deliver the expected boost to sales. Our estimate compares to guidance of +LSD and consensus of +2.3%, although our estimate is likely in line with current sentiment. FQ4 EPS guidance could be revised downward or the current range narrowed, but with the stock down 7% over the past four weeks, this is probably priced in. Despite a disappointing holiday season, we remain positive on shares heading into 2013 due to the sale of the credit portfolio, opening of the first Canadian stores this spring, improving home category trends and an attractive valuation.”
Target shares were up 31 cents, or +0.53%, during trading on Monday. The stock is up +14.96% year-to-date.
The Bottom Line
Shares of Target (TGT) have a 2.46% dividend yield, based on the latest intraday stock price of $58.63. The stock has technical support in the $54-$56 price area. If the shares can firm up, we see overhead resistance around the $62 price level.
Target Corporation (TGT) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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