Target (TGT) Offering Possible 11.61% Return Over the Next 30 Calendar Days

Target's most recent trend suggests a bullish bias. One trading opportunity on Target is a Bull Put Spread using a strike $65.00 short put and a strike $60.00 long put offers a potential 11.61% return on risk over the next 30 calendar days. Maximum profit would be generated if the Bull Put Spread were to expire worthless, which would occur if the stock were above $65.00 by expiration. The full premium credit of $0.52 would be kept by the premium seller. The risk of $4.48 would be incurred if the stock dropped below the $60.00 long put strike price.

The 5-day moving average is moving down which suggests that the short-term momentum for Target is bearish and the probability of a decline in share price is higher if the stock starts trending.

The 20-day moving average is moving up which suggests that the medium-term momentum for Target is bullish.

The RSI indicator is at 74.08 level which suggests that the stock is neither overbought nor oversold at this time.

To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here

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LATEST NEWS for Target

Lululemon (LULU) Stock Looks Like a Buy & It Just Raised Its Q4 Guidance
Mon, 14 Jan 2019 20:01:08 +0000
Shares of Lululemon (LULU) soared as high as 8% in morning trading Monday after the yoga apparel powerhouse raised its Q4 earnings and revenue guidance.

What’s the Expected Upside in Target Stock?
Mon, 14 Jan 2019 14:01:20 +0000
Target Shone during the Holidays—Why Didn't Its Stock?

(Continued from Prior Part)

## Ratings and target price

The majority of Wall Street analysts maintain neutral outlooks on Target (TGT) stock. Analysts expect Target to benefit from increased consumer spending. Its comps are likely to sustain momentum in the coming quarters driven by growth in its traffic.

Target’s investments in price, expanded digital offerings, store remodelings, the opening of small-format stores, and exclusive brand launches are expected to support its top line growth. However, pressure on its margins is expected to hurt its stock.

Among the 26 analysts providing ratings on Target stock, 16 have given it “holds,” nine have given it “buys,” and one has given it a “sell.” Analysts have a consensus target price of $82.12 per share on TGT stock, which implies a potential upside of 20.3% based on its closing price of $68.29 on January 10.

## What Wall Street recommends for TGT’s peers

The majority of analysts have favorable outlooks on Costco (COST) stock. Costco continues to generate strong sales and earnings growth and outperform its peers. Among the 28 analysts following COST, 17 have given it “buy” ratings, and 11 have given it “holds.” Analysts maintain a consensus target price of $237.70 on the stock, which indicates a potential upside of 12.8%.

Meanwhile, of the analysts covering Walmart (WMT) stock, 18 have given it “holds,” and 14 have given it “buys.” Analysts have a consensus target price of $106.81 on WMT, which indicates a potential upside of 12.5% based on its closing price of $94.96 on January 10.

Browse this series on Market Realist:

* Part 1 – Target Shone during the Holidays—Why Didn’t Its Stock?
* Part 2 – What’s in the Offing for Target Stock?
* Part 3 – Why Target’s Digital Sales Could Grow at a Healthy Rate

Don’t Let the Rally In Bed Bath & Beyond Stock Fool You
Mon, 14 Jan 2019 13:56:09 +0000
Shares of struggling merchandise retailer Bed Bath & Beyond (NASDAQ:BBBY) surged as much as 20% after the company reported third-quarter numbers that included a bullish forecast from management. Specifically, management said that due to the early success of a few profit-optimizing initiatives, fiscal 2019 earnings are expected to be flat with fiscal 2018 earnings, and fiscal 2020 earnings are expected to be up from both.

The Street had been sitting at earnings-per-share of $2 for fiscal 2018, $1.60 for fiscal 2019 and $1.40 for fiscal 2020. Thus, the guide for $2-plus EPS in fiscal 2019 and 2020 was a huge 20%-plus lift. Consequently, BBBY stock rallied 20%.

But, don't let this rally fool you. Bed Bath & Beyond still missed on revenues and comparable sales in the quarter. The comparable sales miss was wide, and comps are still negative. Gross margins are still falling. So are operating margins. Profits are down, too.

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In other words, nothing about the current numbers warranted a 20% rally in BBBY stock. Instead, the rally was powered entirely by what management said is going to happen. Granted, management knows their business better than anyone, so the guide shouldn't be disregarded. But, it also seems ambitious given current trends.

In the big picture, a lot needs to go right in order for earnings to grow over the next several years. If that does happen, BBBY stock could essentially double. But, it probably won't happen, and as such, the stock is best avoided until there's confirmation in the numbers that presently negative trends are reversing course.

### BBBY Stock: The Quarter Was Still Awful

By most retail standards, Bed Bath & Beyond's third quarter was pretty bad.

* 10 A-Rated Stocks the Smart Money Is Piling Into

Comparable sales dropped 1.8%. The consensus was for a 0.3% drop, so that's a wide miss. It's also a 2018 low, as comps in the first two quarters of the year dropped 0.6%. Plus, it's lower than the comp drop in 2017 (down 1.3%) and 2016 (down 0.6%). In other words, comparable sales trends are still negative, and arguably only getting worse.

Meanwhile, gross margins are still falling. In the quarter, gross margins fell back by 210 basis points year-over-year. Granted, that's better than the second quarter's 270 basis point compression. But, it's also worse than the first quarter's 140 basis point compression. Also, margins have come down a lot from their peak, and the fact that they are still falling by several hundred basis points year-over-year is a bearish trend.

Overall, this is still a declining comp, eroding margin company with trends that aren't getting better yet. Those trends could get better. But, a lot has to go right in order for that to happen.

### A Lot Has to Go Right

Bed Bath & Beyond's struggles aren't anything new. For several years, this has been a retailer with negative comparable sales growth, eroding margins, and falling relevancy in an increasingly competitive retail world.

Management implied that this era is coming to an end. Specifically, due to a few profit-optimizing initiatives, management expects margins to finally stabilize and potentially even improve over the next several years.

That's a tall order. Gross margins have been in perpetual decline for most of this decade due to elevated competition. That competition is only getting bigger, stronger and fiercer than ever before, with Amazon (NASDAQ:AMZN), Walmart (NYSE:WMT) and Target (NYSE:TGT) all aggressively turning into low-cost, one-stop-shop retail destinations with unparalleled convenience. In that environment, it's tough to see BBBY's gross margins heading higher.

Management could cut lower margin SKUs and/or not engage in price wars with the Big Three. It seems that's what they are planning to do. That will preserve gross margin. It will also accelerate the comparable sales erosion. If comps keep falling, or start falling by more, there's no way the company can leverage operating expenses and pull down the SG&A rate.

Big picture, it's tough to see BBBY stock benefiting from a trio of positive comps, rising gross margins and falling opex rates over the next several years. If you get all three, the company could reasonably do about $3 in EPS in five years. A historically average 10X forward multiple on that implies a $30 long-term price target.

But, because of the aforementioned competitive risks, you likely won't get all three. Instead, you will gross margin expansion at the expense of sales growth, and that will lead to — at best — stable earnings. If BBBY stock is supported by stabilized $2 EPS in five years, then an average 10X forward multiple on that implies a four-year forward price target of $20. Discounted back by 10% per year, that equates to a present value for BBBY stock of between $13 and $14.

* 7 Pharmaceutical Stocks That Just Raised Prices This Year

That's exactly where BBBY stock trades today, so realistic growth assumptions imply shares are fairly valued here.

### Bottom Line on BBBY Stock

The quarter wasn't good, the guide is promising and there's finally a light at the end of this dark tunnel for Bed Bath & Beyond stock.

But, that doesn't mean it's time to buy into the stock. Instead, Bed Bath & Beyond stock seems fully valued after its post-earnings pop, and further upside will have to be confirmed by an improvement in the numbers, which hasn't happened just yet.

As of this writing, Luke Lango was long AMZN and TGT.

### More From InvestorPlace

* 2 Toxic Pot Stocks You Should Avoid
* 10 Key Emerging-Market Stocks to Buy for Contrarian Investors
* 7 Stocks at Risk of the Global Smartphone Slowdown
* 7 Pharmaceutical Stocks That Just Raised Prices This Year

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The post Don't Let the Rally In Bed Bath & Beyond Stock Fool You appeared first on InvestorPlace.

Why Target’s Digital Sales Could Grow at a Healthy Rate
Mon, 14 Jan 2019 12:31:38 +0000
Target Shone during the Holidays—Why Didn't Its Stock?

(Continued from Prior Part)

## Stellar performance so far in fiscal 2018

Target Corporation’s (TGT) digital sales have accelerated sequentially in the past couple of quarters and have grown at a rapid rate. Target’s comparable digital sales rose 28%, 41%, and 49%, respectively, in the first, second, and third quarters of 2018. Meanwhile, its digital sales rose 29% during the holiday season. Moreover, its Order Pickup and Drive Up services surged 60% during the holidays and accounted for ~25% of its digital sales.

In comparison, Walmart’s (WMT) digital sales also increased sequentially in the first three quarters of fiscal 2019. Walmart’s digital sales jumped 43% during its last-reported quarter as the world’s largest retailer expanded its online grocery pickup services and offered fast doorstep delivery.

## Outlook

Target’s e-commerce sales are expected to sustain momentum in the coming quarters driven by the expansion of its fast-delivery options to newer markets and growth in the membership base for Shipt. At the end of the third quarter, Target had expanded its same-day delivery through Shipt to 1,400 stores across 25 markets.

To match Walmart’s and Amazon’s (AMZN) curbside pickup services, Target has grown its drive-up service to ~1,000 stores. Its ship-from-store and Restock services are likely to support its e-commerce sales growth rate.

Besides its convenient fulfillment options, Target’s value pricing and focus on merchandising are expected to drive its top line growth.

Continue to Next Part

Browse this series on Market Realist:

* Part 1 – Target Shone during the Holidays—Why Didn’t Its Stock?
* Part 2 – What’s in the Offing for Target Stock?
* Part 4 – What’s the Expected Upside in Target Stock?

Macy's Stumbles From Grace
Mon, 14 Jan 2019 02:00:00 +0000
Too-high hopes for the retailer’s holiday quarter led to a sharp sell-off, but things aren’t quite as bad as the market would have you believe.

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