Results: Target Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts

It's been a pretty great week for Target Corporation (NYSE:TGT) shareholders, with its shares surging 15% to US$174 in the week since its latest annual results. The result was positive overall - although revenues of US$107b were in line with what the analysts predicted, Target surprised by delivering a statutory profit of US$8.94 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Target

Following last week's earnings report, Target's 30 analysts are forecasting 2025 revenues to be US$107.2b, approximately in line with the last 12 months. Per-share earnings are expected to accumulate 3.4% to US$9.27. In the lead-up to this report, the analysts had been modelling revenues of US$106.7b and earnings per share (EPS) of US$9.09 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 14% to US$178. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Target, with the most bullish analyst valuing it at US$206 and the most bearish at US$132 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 0.2% annualised decline to the end of 2025. That is a notable change from historical growth of 8.6% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Target is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Target's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Target's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Target. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Target analysts - going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Target that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.