Target to sink back to 5-year lows after today’s earnings?

By ForexTime 

• Target set to release earnings before US markets open today (Wed, May 21st)
• US tariff fears expected to hit results for Q1 FY2026 (3 months ending April 30th)
• Comparable sales forecasted to fall 1.8% year-on-year; EPS to drop over 18% y/y
• Post-earnings, 1-day move predicted at 9.3% up/down for Target shares today
• Wall Street analysts predict, pre-earnings, 20.8% upside over next 12 months
  

Target is set to unveil its fiscal Q1 earnings before US markets open today (Wed, May 21st).

At the time of writing, Target’s stocks are languishing around their lowest levels since August 2019.

Perhaps more tellingly, this stock has struggled to recover back above the psychologically-important $100 level since US President Donald Trump’s “liberation day” tariffs announcement on April 2nd.

Furthermore, as of the closing price on Tuesday, May 20th, Target’s stocks remain 27.4% lower so far this year.

Such sluggishness is all the more obvious when compared to the rebound in broader US stock markets over the past month, with the benchmark S&P 500 now back up 1% year-to-date.

From a technical perspective, despite finding some measure of support at its 21-day simple moving average (SMA) in recent sessions, Target remains hemmed in by its 50-day SMA, besides the earlier-mentioned psychological $100 level.

Could its fortunes change by today’s market open? 

Experts think it’s unlikely.

Target’s fiscal Q1 2026 earnings (three months ending 30 April 2025): What to look out for?

Overall, Wall Street analysts predict that Target’s soon-to-be-released financial figures will point to a spending pullback by Target’s cautious customers who are wary about US tariffs.

This retail giant is expected to post the following key metrics:

• Comparable Sales: down 1.84%
• Average transaction amount: down 1.77%

Additionally, here are other (adjusted) headline numbers to look out for:

• Revenue: US$ 24 billion – lowest since fiscal Q3 2021
  If so, that would mark a 2.1% drop compared to Q1 FY2025
• Net income: US$ 756.7 million – lowest since fiscal Q3 2023
• Earnings per share (EPS): US$1.66
  If so, that would mark an 18.08% drop compared to Q1 FY2025

More importantly, traders and investors will be glued to Target’s outlook on how US consumer demand might hold up in the face of tariff threats.

Can Target draw inspiration from other retail giants?

Target bulls (those hoping this stock can push higher) will be hoping that this retail giant can emulate the earnings outlook from another retail giant: Home Depot.

Just before US markets opened on Tuesday, May 20th, Home Depot – the world’s biggest home-improvement retailer – maintained its full-year sales forecast.

And that’s despite reporting a 0.3% drop in comparable sales for its latest fiscal quarter amid similar expected dampeners to consumer spending.

Home Depot execs also said they expect:

• the worst of economic concerns to be in the past
• tariffs to not translate into broad price increases

To be certain, even such seemingly soothing signals were unable to prevent Home Depot’s shares from falling 0.6% post-earnings during Tuesday’s cash session.

In contrast to Home Depot, Walmart sang a different tune at its quarterly results unveiling last week.

Walmart – the largest retailer in the world – suggested that:

• price spikes stemming from tariffs are starting to take hold
• the company would likely pass on such costs to end users

It remains to be seen what sort of signals will be conveyed by Target’s C-suite, whether it’s more in line with Home Depot’s confidence, or Walmart’s warnings.

Potential Post-Earnings Scenarios

Note that markets currently predict that Target shares could move 9.3% up or down when US markets reopen today – Wednesday, May 21st  – right after its earnings announcement.

• BULLISH: Should Target unveil better-than-expected Q1 figures, and more importantly speak confidently of resilient spending among US consumers, that could launch its stock back above $107 for the first time since March.

• BEARISH: Should Target announce lower-than-expected Q1 results, coupled with growing concerns about weakening US consumer spending amid persistent tariff fears, or worse – pull its earnings guidance altogether for the year – that may see Target’s stocks gapping down to open around the $89.00 level – close to its year-to-date/5-year lows.

Over the next 12 months …

Wall Street analysts are rather neutral on this stock’s 12-month prospects, with:

• 23 “Hold” calls
• 14 “Buys”
• 2 “Sells”

Yet Target’s stocks are predicted to have another 20.8% potential upside over the next 12 months, potentially hitting $118.51 by May 2026.

Of course, all those analysts’ forecasts and 12-month target price may change drastically in a few hours, depending on what Target conveys to markets.

Targets earnings announcement is bound to offer the latest clues on the overall health of US domestic consumption – the primary driver of the world’s largest economy – while also potentially producing outsized trading opportunities in the immediate aftermath.

Article by ForexTime

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