Stocks have declined by an average of 7.9% over the last five earnings reports, can the retailer turn the trend around?

Retail giant Target Corporation is gearing up to reveal its fourth-quarter financial results under new CEO Michael Fiddelke, and analysts are eager to see if the company can reverse its recent trend of falling stock prices. The report is scheduled to be released on Tuesday before the market opens, and many experts are offering their insights and expectations.

According to data from Benzinga Pro, analysts anticipate Target to report fourth-quarter revenue of $30.50 billion, a slight decline from the previous year’s $30.91 billion. The company has a track record of surpassing revenue estimates in six out of the last ten quarters, missing only in the third quarter of the most recent year. Additionally, analysts are predicting earnings per share of $2.16 for the fourth quarter, a decrease from the $2.41 reported in the same period the previous year. Target has exceeded EPS estimates in seven of the last ten quarters, including in the most recent third quarter.

Market strategist Jay Woods from Freedom Capital Markets notes that Target shares have experienced a downward trend after the last five earnings reports, with an average loss of 7.9%. Despite this, the stock has shown positive momentum in recent times. Woods emphasizes that Target’s share prices have consistently displayed higher highs and higher lows since the autumn of the previous year, indicating a promising upward trajectory. He attributes this positive outlook to new leadership and growth within the consumer staples sector. Woods states that Target stock appears healthy, suggesting a potential longer-term target price of $140.

Bank of America Securities analyst Christopher Nardone has reinstated Target coverage, giving it an Underperform rating and a price target of $103. Nardone believes that Target’s turnaround efforts may take longer than initially anticipated, citing challenges in pricing competition with rivals. He suggests that an earnings recovery for Target might be a gradual process.

Key elements to monitor in Target’s upcoming report include the progress of the company’s partnership with OpenAI, particularly the utilization of the Target app within ChatGPT for enhanced customer interaction. Additionally, investors will be interested in the performance of digital sales, which have been a significant growth driver for Target. Analysts are also keen to see signs of improvement in discretionary categories, which have shown weakness.

Recent data from Placer.ai indicates that Target may be losing market share to competitor Walmart, with foot traffic trends in the fourth quarter favoring Walmart over Target. Walmart’s visits experienced a year-over-year increase of 2.3% in Q4, while Target saw a decline of 2.0%. Further insights are expected to shed light on Target’s competitive position relative to Walmart.

As Target prepares to disclose its quarterly results, investors are closely monitoring how the company’s strategic initiatives and market dynamics will impact its financial performance moving forward. With a mix of optimism and caution in analysts’ assessments, Target’s fourth-quarter report is anticipated to offer valuable insights into the retailer’s progress under new leadership.