Target

[Jerome]

Target reports a loss in the last quarter. The stock therefore receives a one-star rating because the dividend is potentially no longer covered by profits. However, I will not sell for now because this loss is linked to exceptional restructuring measures in Canada.

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MINNEAPOLIS (AP) _ Target Corp. (TGT) on Wednesday reported a fiscal fourth-quarter loss of $2.64 billion, after reporting a profit in the same period a year earlier.

The Minneapolis-based company said it had a loss of $4.10 per share. Earnings, adjusted to account for discontinued operations and non-recurring costs, were $1.50 per share.

The results exceeded Wall Street expectations. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of 1TP4Q1.46 per share.

The retailer posted revenue of 1TP4Q21.75 billion in the period, also beating Street forecasts. Analysts expected 1TP4Q21.65 billion, according to Zacks.

For the current quarter ending in April, Target expects its per-share earnings to range from 95 cents to $1.05. Analysts surveyed by Zacks had forecast adjusted earnings per share of 1TP4Q1.05.

Target shares have risen slightly more than 1 percent since the beginning of the year, while the Standard & Poor's 500 index has risen almost 3 percent. The stock has increased 37 percent in the last 12 months.

[loorloop]

Hi Jerome,

Target shares suffered a very large drop in late February 2017 following the announcement of results.

Do you think this is a buying opportunity or that the sustainability of the dividend will potentially no longer be assured in the future?

Thank you for your reply

Felix

[Jerome]

Hi

TGT has been in a bearish phase for some time. In the long term, I nevertheless continue to believe in the potential of this company. Indeed, the drop in price makes the stock more attractive. At the moment, there are not many interesting stocks left given the market valuation. I would perhaps wait a little longer before buying. Concerning the sustainability of the dividend, I remain confident.

[loorloop]

Thanks for your reply Jérôme 🙂

Why would you perhaps wait a little longer before buying?

Is this because the stock could potentially fall further since it has entered a downtrend or for some other reason?

As a beginner, I would tend to want to go for it since it meets my objectives (payout – of 66%, minimum 4.5% of yield and 10% of increase on average) so I would like to understand how you reason. 🙂

[Jerome]

The title is interesting. It's more the market that is less. So if you want to start with that why not, but go there modestly. That will prevent you from being disgusted right away, as I was in 2000.

And then it's true, as the saying goes, you don't catch a falling knife... Even if I still do it sometimes😉

[loorloop]

Thanks for the advice Jérôme,

So, I waited at least until we broke the MM50 in daily.
And only 1/3 of my capital available: 8 titles at 57$38/u

At this price we are slightly below my objectives but it is true that there is not much (or I am blind) to get our teeth into these days. 🙂

[Jerome]

No, I assure you, your eyes are wide open! 🙂

[Author]

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