Target Corp (TGT)

NetscribeRetail (80.57) Submitted: 5/30/07 6:38 AM : Start Price: $59.42 TGT Score: 3.84

Plainly becoming not only a well-differentiated convenience-oriented general merchandise alternative to Wal-Mart, but also a more desirable alternative for increasing number of consumers, the company’s good merchandising will definitely help to take market share from a range of competitors. Pleased with the strength of first quarter results in both core retail and credit card operations, the overall performance reinforces confidence in Target’s ability to continue generating profitable market share growth for fiscal 2007 and many years to come.





The quarter one results were not only impressive but also great turnaround after it raised some fears when it reported that same-store sales dropped 6.1% for April, due to an earlier Easter. However, revenues for quarter one increased by 9% to $14.04 billion reflecting increase in comparable store sales and growth attributable to opening of new stores, besides higher income from credit card operations and others. Also net income increased by 18% to $651 million due to decrease in credit card expenses. Furthermore company repurchased 9.2 million shares for $549 million which will enable it to improve its EPS.





Besides to sustain the company’s competitive advantage and continue to delight its guests, it is launching several new initiatives, for instance, by significantly enhancing its offerings in electronics, introducing unique style and looks in a collection called Libertine. It is also extending its limited engagement strategy to women's accessories, adding a collection of handbags, clutches, and wallets. Also this quarter marks the beginning of Target's new online photo partnerships with Shutterfly and Kodak Gallery. Even management reiterated analyst’s average EPS forecast of $3.60 being within the range of likely outcomes for the retailer. All in all, Target remains the high quality undervalued play in the discounter’s space and is uniquely positioned to succeed in various macro environments.

Report this Post Replies: 0 | Reply