E = Earnings Are Increasing Quarter-Over-Quarter
A rising stock price is often a result of increasing earnings and revenue growth rates. Of course, a seasoned company like Target is not able to post rates as large as pure growth companies and investors are aware. What do the last four quarterly earnings and revenue growth figures for Target look like? The last four quarterly earnings growth (Y-O-Y) rates have been: 2.08, 17.07, 2.91, and 5.05 percent while the last four revenue growth (Y-O-Y) rates have all been: 6.76, 3.21, 3.32, and 5.85 percent. Target has displayed great earnings and revenue growth rates over the last four quarters.
How did investors take these numbers? The last four quarterly earnings announcement reactions help gauge investor sentiment on Target’s stock. The last four quarters have seen next trading session returns of -1.45, 1.72, 1.76, and 0.43 percent. The markets have been pleased with Target’s earnings reports. The latest negative next trading session return has proven to be a buying opportunity as the stock has shot much higher in the days that followed.
E = Excellent Relative Performance Versus Peers and Sector
Target has been in a strong uptrend since its IPO but how has the stock done, relative to its peers and sector, year-to-date? Year-to-date, the stock is returning 12.46 percent while its competitors, Costco (NASDAQ:COST), Wal-Mart (NYSE:WMT), Dollar General (NYSE:DG), and sector are returning 1.42, 5.42, 10.81, and 7.36 percent respectively. Target has led its peers and sector by a significant margin.
Target offer the ease, prices, and convenience that a general merchandise store should. Consumers are pleased with their business model as seen in its increasing earnings and revenue growth rates. These increasing earnings and revenue growth rates have in turn fueled a rising stock price that has outperformed its peers and sector. Look for Target stock to OUTPERFORM.
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