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Earnings Recap: No Bullseye For Target; Here's Why Shares Plunged After Earnings Today

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This article is more than 7 years old.

Target Corp plunged over 12% in the pre-market after the company reported Q4 2016 earnings. The company earned $1.45 per share on revenue of $20.7 billion last quarter. The company missed on both the top line and bottom line. The Street expected the company to earn $1.50 per share on revenue of $20.8 billion. The so-called Whisper number was $1.54 per share. The big miss bodes poorly for the retail giant and strengthens the argument the company needs to change its strategy to effectively compete and ultimately grow market share again.

Lousy Guidance:

Target also disappointed when it released forward guidance. The retail giant expects to earn $0.80 to $1.00 per share in Q1 2017 and fiscal 2018 earnings of $3.80 to $4.20 per share. That is much lower than the Street's current forecast of $1.31 per share for Q1 2017 and $5.29 per share for the year ending January 31, 2018! If the company is not bullish on its future, why should investors? That's another reason why the stock is down so much today.

Stock Has Been Falling For 3 Years:

The stock has been falling for three years. The stock hit a record high of $85.81 in 2015 and is currently trading in the high 50's. Here is a 5 year chart of Target and the benchmark S&P 500. The stock has woefully under-performed. Clearly, the company needs to change its strategy to compete effectively in today's marketplace and do something to attract both consumers and shareholders. I know a very good firm that offers corporate strategy. If someone wants to talk, feel free to get in touch.

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