FINWIRES · TerminalLIVE
FINWIRES

Target Likely to Post Strong First-Quarter Comparable Sales Growth, UBS Says

By
Target Likely to Post Strong First-Quarter Comparable Sales Growth, UBS Says

Target (TGT) is expected to post strong fiscal first-quarter comparable sales growth, indicating a "cleaner" setup into the year for the retailer, UBS Securities said in a note e-mailed Tuesday.

The market is anticipating Target's first-quarter comparable sales growth of 4% to 5%, ahead of the company's projections and the consensus view for an increase of about 1%, according to the brokerage. The company's comparable sales in the quarter grew 3.9%, UBS said in a note to clients, citing Bloomberg Second Measure data.

"Despite a tumultuous last few years, (Target's) recovery in 2026 is off to a promising start," UBS analysts, including Michael Lasser, said. "Many of last year's headwinds are now rolling off, including the impact from boycotts, one-time tariff costs, and elevated markdown activity."

"As a result, the setup into 2026 is cleaner," the analysts wrote.

Target is scheduled to report results May 20.

The company is also reaping gains from its transformation initiatives that include streamlining operations and improving merchandising relevance, according to UBS.

Based on recent traffic trends, Target may be outperforming both Walmart (WMT) and Costco Wholesale (COST) on a year-over-year basis, though against "much easier" comparisons, the analysts said.

"In essence, we think the company will report $0.30 to $0.40 of (earnings-per-share) upside in (the first quarter)," the analysts wrote. Target is expected to pass this through to its full-year bottom-line outlook, bringing the updated range to $7.85 to $8.85 from $7.50 to $8.50, according to the note.

While the company's turnaround plan seemed to have impressed investors, as its shares have advanced more that 20% so far this year, UBS still sees "significant more potential" for the stock.

The brokerage outlined what it called "three elements of the upside case."

"First, there is potential for comp outperformance that is not fully reflected in expectations," the analysts said. "Second, if that outperformance materializes, it should translate into better flow-through on margins. And third, we think there's room for the multiple to run higher."

Price: $121.50, Change: $+3.06, Percent Change: +2.58%

Related Articles

Nasdaq, S&P 500 Retreat From Record Highs Amid Losses in Tech Sector
US Markets

Nasdaq, S&P 500 Retreat From Record Highs Amid Losses in Tech Sector

The Nasdaq Composite and the S&P 500 fell Tuesday as technology shares slid, with traders apparently spooked by a hotter-than-anticipated inflation report and higher oil prices.The Nasdaq shed 0.7% to 26,088.2, while the S&P 500 lost 0.2% to 7,401, following their back-to-back record closing highs. The Dow Jones Industrial Average added 0.1% to 49,760.6, rising for a third consecutive session. Most sectors ended in the green, led by healthcare, while consumer discretionary saw the steepest decline.Shares of several big tech names tumbled with Qualcomm (QCOM) sliding nearly 12%, the worst performer on the S&P 500. Intel (INTC) followed Qualcomm on the index, down 6.8%. Salesforce (CRM) dropped 3.5%, the steepest decline on the Dow, followed by IBM (IBM), which fell 1.9%.Micron Technology (MU), Oracle (ORCL), Advanced Micro Devices (AMD), Dell Technologies (DELL), Microsoft (MSFT) and Amazon.com (AMZN) also logged declines.In economic news, US annual consumer inflation accelerated in April to the fastest pace in almost three years as energy prices surged amid the near-complete closure of the Strait of Hormuz. Core inflation, which excludes the volatile food and energy components, hit a seven-month high, official data showed."The unfavorable and larger-than-expected jump in core prices shows pressures are now spreading beyond energy, transportation, and food, into larger categories such as services and housing," Scott Anderson, chief US economist at BMO, said in a report. "If the energy price shock doesn't subside soon, we can expect more of the same in the months ahead."Energy prices surged nearly 18% annually last month, marking the biggest jump since September 2022, official data showed."The closure of the Strait of Hormuz is doing significant damage to the (Federal Reserve's) ability to hold the line on inflation," Anderson said. "At a minimum, this inflation report will keep the Fed on hold longer and may facilitate a move toward a more neutral policy stance at upcoming meetings -- removing the (Federal Open Market Committee's) implicit rate cut bias."The Fed, which late last month kept its policy rate steady for a third consecutive meeting, is widely expected to stay put again next month, according to the CME FedWatch tool. Its latest policy statement include an easing bias, which was opposed by three regional presidents.Chicago Fed President Austan Goolsbee said inflation data on the services side was "unexpectedly disappointing," Reuters reported.Inflation is "going the wrong way, and it's going the wrong way not just in oil-related things and not just in tariff-related things," Goolsbee was quoted as saying at an event in Rockford, Illinois.US Treasury yields were higher, with the 10-year rate up five basis points at 4.46% and the two-year rate rising 3.2 basis points to 4%.West Texas Intermediate crude was last up 4.4% at $102.39 per barrel, while Brent rose 3.5% to $107.86.US President Donald Trump recently rejected Iran's counteroffer to end the war, extending uncertainty around oil flows through the crucial Strait of Hormuz.Trump is now more seriously considering restarting military operations against Iran than he has in recent weeks, CNN reported, citing his aides. Trump, who will fly to Beijing this week, reportedly said he will have a "long talk" about the Iran war with Chinese leader Xi Jinping, though he downplayed the idea he would want China to play a role in ending the conflict."The global oil market continued to tighten amid limited prospects for a reopening of the Strait of Hormuz," Saxo Bank said in a report.In company news, EBay (EBAY) rejected video game retailer GameStop's (GME) proposal to acquire the e-commerce company in what would have been a $55.5 billion deal. EBAY shares rose 2.1%, while GameStop fell 3.5%.Gold was last down 0.2% at $4,721.20 per troy ounce, while silver gained 1.6% to $87.30 per ounce.

$^DJI$^IXIC$^SPX$AMD$AMZN$CRM$DELL$EBAY$GME$IBM$INTC$MSFT$MU$ORCL$QCOM
Boeing Trails Airbus in April Deliveries, Beats in Orders
US Markets

Boeing Trails Airbus in April Deliveries, Beats in Orders

Boeing (BA) trailed European rival Airbus in deliveries for April, though the US planemaker's order count came in way stronger.Boeing delivered 47 commercial jets last month, including 34 737 Max aircraft. The April tally was higher than overall deliveries of 46 the month prior and 45 a year earlier. Airbus delivered 67 aircraft in April, data on the companies' websites showed Tuesday.Boeing shares were down 1.5% in late-afternoon trade. The stock has gained 8.1% in value so far in 2026.Boeing booked orders for 136 jets last month, up from 33 sequentially and eight a year earlier. Airbus' order count for April was 28.Late last month, Biman Bangladesh Airlines ordered 14 Boeing aircraft, including eight 787-10s, four 737-8s, and two 787-9s.In the year through April, Boeing has delivered 190 aircraft versus Airbus' tally of 181, data on the companies' websites showed.Boeing's unfilled orders at the end of April reached 6,814 jets.In April, the company's first-quarter loss unexpectedly narrowed as commercial aircraft deliveries rose, while the plane maker reported a smaller cash burn year over year.Price: $233.94, Change: $-4.27, Percent Change: -1.79%

$BA
Equities Fall Intraday Amid Tech Sell-Off
US Markets

Equities Fall Intraday Amid Tech Sell-Off

US benchmark equity indexes were mostly lower intraday, weighed down by a technology sell-off, as investors assessed the latest consumer inflation report.The Nasdaq Composite was down 1.5% at 25,886.7 after midday Tuesday, while the S&P 500 fell 0.6% to 7,368.1. Both indexes hit new peaks in the previous session. The Dow Jones Industrial Average was little changed at 49,708.5.Among sectors, tech saw the steepest decline, shedding 2%, while healthcare paced the gainers.Shares of several big tech names were down intraday Tuesday, with Qualcomm (QCOM) sliding 13%, the worst performer on the S&P 500. Intel (INTC) followed Qualcomm on the index, down 9.3%. Salesforce (CRM) declined 2.9%, the steepest decline on the Dow.Oracle (ORCL), Advanced Micro Devices (AMD) and Dell Technologies (DELL) fell about 5% each. Amazon.com (AMZN) and IBM (IBM) also logged declines, with Microsoft (MSFT) and Nvidia (NVDA) marginally lower.In economic news, US annual consumer inflation accelerated in April to the fastest pace in almost three years as energy prices surged amid the near-complete closure of the Strait of Hormuz. Core inflation, which excludes the volatile food and energy components, accelerated to the fastest since September, official data showed."A hotter-than-expected CPI report underscores the ongoing impact of higher energy prices seeping further into the economy with the core jumping to a seven-month high," Stifel Chief Economist Lindsey Piegza said in a note emailed to.Energy prices surged nearly 18% annually last month, marking the biggest jump since September 2022, official data showed."This morning's numbers reinforce why the (Federal Reserve) needs to remain patient," Thomas Feltmate, senior economist at TD Economics, said in a report. "With secondary price effects from higher energy prices likely to intensify in the months ahead, we're likely to see core measures of inflation drift a bit higher and hover around 3% through year-end."The Fed, which late last month kept its policy rate steady for a third consecutive meeting, is widely expected to stay put again next month, according to the CME FedWatch tool.US Treasury yields were higher intraday Tuesday, with the 10-year rate up 4.9 basis points at 4.46% and the two-year rate rising 4.4 basis points to 4.01%.West Texas Intermediate crude was up 3.7% at $101.67 per barrel intraday Tuesday, while Brent rose 3.3% to $107.66.US President Donald Trump recently rejected Iran's counteroffer to end the war, extending uncertainty around oil flows through the crucial Strait of Hormuz.Trump is now more seriously considering restarting military operations against Iran than he has in recent weeks, CNN reported, citing his aides."The global oil market continued to tighten amid limited prospects for a reopening of the Strait of Hormuz." Saxo Bank said in a report.In company news, EBay (EBAY) rejected video game retailer GameStop's (GME) proposal to acquire the e-commerce company in what would have been a $55.5 billion deal. EBAY shares were up 0.8% intraday, while GameStop fell 0.7%.Gold was down 0.9% at $4,688.10 per troy ounce, while silver lost 0.4% to $85.60 per ounce.

$^DJI$^IXIC$^SPX$AMD$AMZN$CRM$DELL$EBAY$GME$IBM$INTC$MSFT$NVDA$ORCL$QCOM