Target Q2 earnings preview: Analysts anticipate softness, cut price target

Target (NYSE:) is due to report its second quarter on Wednesday, August 16. The stock was the subject of at least 4 analyst downgrades since June.

Moreover, several analysts lowered their price targets this week in anticipation of a soft earnings report.

Barclays analysts cut the price target by $21 to $142 per share as they believe sales slowed in Q2. They see these 3 key questions dominating the earnings call next week.

1) Whether the company can support EPS during this weaker period;

2) The composition of the slowdown as we look for cues for a recovery;

3) How the market share story has evolved even before the recent slowdown.

Similarly, Telsey Advisory Group analysts lowered the PT by $20 to $165 per share.

“We are lowering our 2Q23 estimates to reflect softness in traffic, especially in late May to mid-June related to issues with the Pride assortment, along with softer consumer spending on select discretionary products, partly offset by the continued outperformance of essentials and gains from strategic initiatives, like digital and loyalty. Furthermore, the softer spending on discretionary could continue in 2H23 and pressure results,” the analysts wrote in a note.

“That said, we believe these soft trends are largely priced in the stock at current levels.”

Target shares are down over 12% year-to-date.