Target Corporation Cuts Guidance Again


Target Corporation (NYSE:TGT) cut its Q2 guidance for the second time in three weeks. According to the announcement, the company will implement a set of actions to right-size its inventory for the balance of the year and manage both rising costs as well as supply chain disruption.
The company cut operating margin guidance for Q2, which implies full 2022 will end up in the ballpark of approximately 5.0% (vs. prior guidance of approximately 6.0%).
While this news is painful to digest, analysts at RBC Capital are hopeful that this is a rip the band aid off type event that will allow the company to operate more efficiently in H2 and beyond.
The analysts expect investors to tread with caution near-term, but believe this decision ultimately makes the name more investable. The analysts trimmed their 2022/2023 EPS estimates to $8.72/$12.84 from $10.57/$13.27, which resulted in their price target moving to $231 $239. Their Outperform rating was reiterated.


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