Stock price when the opinion was issued
Delivered an amazing quarter last week after a brutal 2 years (-62%) suffering problems like too much inventory post-Covid and theft. The new CEO led the company on a rally from last October through April, but the company issued an an earnings miss in May and issued weak guidance for the next quarter. Shares plunged from a skeptical street. But shares jumped 10% last week after reporting. Target is back! They delivered 2% same-store sales growth, a beat, and the first quarter of positive comps since end-2022, even with lower comps. Also, digital sales are up and higher general traffic. They beat earnings and operating margins though lowered slightly their earnings forecast. Reasons for success: controlling theft, launching a successful loyalty program and cutting prices on 5,000 items.
He expects an activist to step in, but they do food and places with scale, like Walmart and Amazon, do it better.