Bellwether Target $TGT Stock Plunges, Pulls Markets Down

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On November 16, 2022, Target $TGT stock did a HUGE gap down open of -15%. The reversal came right off of rectangle resistance.

What Happened?

Target missed on EPS but more importantly, the company lowered its forecast much more than institutional investors had expected. On November 16, 2022, Target reported Q3 adjusted EPS of $1.54 versus the consensus estimate of $2.13. The company reported Q3 revenue of $26.52B versus the consensus estimate of $26.38B.

“In the third quarter, our business delivered comparable sales growth of 2.7 percent, and we saw unit share gains across all of our core merchandise categories. This performance demonstrates the durability of our business model which continues to serve our guests and drive loyalty despite the challenging economic environment,” said Brian Cornell, chairman and chief executive officer of Target Corporation. “In the latter weeks of the quarter, sales and profit trends softened meaningfully, with guests’ shopping behavior increasingly impacted by inflation, rising interest rates and economic uncertainty. This resulted in a third quarter profit performance well below our expectations.”

Target guidance cut surprises Citi

On November 16, 2022, Citi analyst Paul Lejuez said that he did not think Target would cut margin expectations in half, even though he believed it would need to lower guidance. Paul Lejuez tells investors in a research note that the company saw a slowdown in trends in the second half of October. Management has been more cautious about both Q4 sales and margins because the softness has continued into November. He believes that the Q3 performance will raise questions about the margin recovery narrative for next year.

Target results disappointing says Raymond James

On November 16, 2022, Bobby Griffin, an analyst at Raymond James, told investors in a research note that the Q3 earnings miss by Target was disappointing versus consensus expectations. Management guided Q4 comps and EBIT below the consensus view due to sales pressure. The margin recovery narrative is challenged by the miss. Bobby Griffin said that top-line momentum is also weakening, creating additional uncertainty about margins.

Unusual Dark Pool Trade In Target $TGT Stock

A $20 million dark pool trade occurred in Target $TGT stock on November 16, 2022. We think the dark pool trade was a sell order because of how $TGT stock fell. The narrative emerges that an institutional investor, perhaps Citi or another large firm, reduced its long position in the stock.

Target stock chart on November 16, 2022, with a dark pool trade shown with an orange bar.
Target stock chart on November 16, 2022, with a dark pool trade shown with an orange bar.

Make sure to review this lesson on dark pool trading so that you understand the chart above.

Target Stock $TGT Technical Analysis

Target stock $TGT is in a technical downtrend. Long-term indicators suggest a continuation of the downtrend. The reversal occurred off rectange resistance from the August 2022 highs.

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