Target, Ross Stores Expected To Post Higher Revenues As Consumers Stay Resilient: Analysts

Author: Michael Juliano | August 17, 2024 12:46pm

Target Corporation (NYSE:TGT) and Ross Stores, Inc. (NYSE:ROST) should post better revenues for the second quarter as consumers continue spending despite macro uncertainties, according to analysts from Tesley Advisory Group.

Analyst Joseph Feldman expects Target’s second-quarter revenue to improve 2% from a year ago to $25.3 billion when it reports earnings on Wednesday before the market opens. His forecast exceeds FactSet revenue consensus of $25.2 billion.

“Broadly, we believe consumers are showing resiliency as they continue to search for value and focus on essentials, while selectively spending on discretionary items and responding to innovation and newness,” Feldman wrote in a note on Target, commenting on shoppers in general.

Target continues to focus on its value-offering by cutting prices while offering private brands in new stores, he said.

Feldman maintains an Outperform rating and a $190 price target on Target shares.

Analyst Dana Tesley forecasts a 6.9% jump in year-over-year second quarter revenue for Ross Stores to $5.28 billion when it releases its results on Thursday after the market closes. Her expectation exceeds revenue consensus of $5.24 billion.

“We continue to be encouraged by ROST's string of strong results across the past five quarters, with the business navigating macro challenges relatively well despite outsized pressure on some of its core consumers,” she wrote in a note.

“We are encouraged by management's efforts to improve the product mix and drive efficiencies across the business.”

She maintains a Market Perform and $160 price target on the stock.

Price Action: Target gained 1.67% to close at $144.03 on Friday, while exchange-traded funds that track the stock also advanced.

VanEck Retail ETF (NASDAQ:RTH) gained 0.61
Consumer Staples Select Sector SPDR Fund (NYSE:XLP) picked up 0.27%
Simplify Next Intangible Value Index ETF (BATS:NXTV) edged up 0.15%
Federated Hermes U.S. Strategic Dividend ETF (NYSE:FDV) went up 0.41%
Vanguard Consumer Staples ETF (NYSE:VDC) gained 0.32%

Ross Stores slipped 0.27% to close at $147.40 on Friday, while ETFs that follow its shares had mixed results.

VictoryShares THB Mid Cap ETF (NASDAQ:MDCP) rose 0.52%
BlackRock Future U.S. Themes ETF (NYSE:BTHM) slipped 0.03%
IShares U.S. Consumer Focused ETF (BATS:IEDI) moved up 0.24%
LG QRAFT AI-Powered U.S. Large Cap Core ETF (NYSE:LQAI) remained unchanged
Invesco S&P 500 Equal Weight Consumer Discretionary ETF (NYSE:RSPD) rose 0.29%