PREVIEW: Target shares up slightly; Q4 EPS, rev seen dropping

Shares in Target Corp TGT.N up 0.2% in choppy trading on Mon ahead of fiscal Q4 report due before market open on Tues, with investors expecting a drop in rev as the retailer struggles to compete against Walmart and others

Wall Street analysts see the retailer reporting adj EPS of $2.26, down ~24% from $2.98 in year-ago quarter on rev of $30.82 bln, which would be down 3.4% from year-ago, according to LSEG

High interest rates and persistent inflation have hampered U.S. consumer spending. President Donald Trump's new tariff on Chinese goods and threatened tariffs on India, Mexico, and Canada have further cast a shadow over the economy

In last 8 quarters TGT EPS and rev met or beat expectations 6 times, with both EPS and rev missing in Q3

In Jan, TGT had raised its holiday-quarter comparable-store sales forecast on robust demand for clothing, toys, beauty products in Nov, Dec. But co kept its Q4, FY adj EPS forecast in $1.85-$2.45 and $8.30 to $8.90 ranges, suggesting discounts were key to driving sales performance

TGT shares have recently weakened along with rival retailer Walmart WMT.N, which on February 20 forecast sales, profit for current year below expectations, citing the need for caution in navigating an uncertain geopolitical landscape

TGT last traded at $124.47 vs median PT of $142, per LSEG, which shows 38 analyst ratings: 6 'strong buy,' 10 'buy,' 21 'hold' and 1 'sell'

YTD down 8%, so far eyeing a fourth consecutive annual decline after falling ~5% in 2024; meanwhile S&P consumer staples sector .SPlRCS up ~8% YTD after rising ~12% in 2024