Is Target’s Stock a Buy Now?

With shares of Target Corp. (NYSE:TGT) trading at around $58.69, is TGT an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

3-targetSince Target is down today while the market is acting like it’s 1999, everyone is down on Target. The reason for the stock’s poor performance relates to analyst downgrades. Daniel Binder of Jeffries Group (NYSE:JEF) downgraded the stock from Buy to Hold and moved his price target from $74 to $59. Christopher Horvers of J.P. Morgan (NYSE:JPM) changed his target price from $76 to $74. He is bullish long-term. The reasons for these downgrades relate to narrowing margins, poor online execution during the holiday season, increased competition, and increased discounts. Other than increased competition, all of these can be looked at as seasonal factors. Therefore, it’s not a time for panic.

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There have been a lot of insider sales recently, but this is normal for a large company. People sell for a variety of reasons. What is more interesting is that there hasn’t been any insider buying.

Without overanalyzing, let’s get to the bottom line: Target isn’t going anywhere. It’s just a matter of whether or not this is a good entry point. Let’s take a look at some important numbers, which may provide clues.