Target Corporation’s (TGT) stock has been under pressure since mid-May. The retailer could have an opportunity to turn it around with its second quarter earnings report. Target will announce results before the market opens on Wednesday, August 16, 2023. (1)
Analysts expect TGT to post a profit of $1.48 per share (EPS) compared to $0.39 for the same period last year. Meanwhile, revenue is forecasted to slip a few percent, from $26.04 billion in 2022 to $25.59 billion this year. (2)
Since mid-June, Target shares have been range-bound, boxed in with an upper guardrail at $137ish and a lower guardrail at $130ish. Generally speaking, stocks tend to make moves up or down in similar lengths of consolidation. To get an idea of potential upside or downside, investors can draw a horizontal line from the beginning to the end of range-bound trading, copy the line, and flip it to vertical to see how many points might be in play.
As you can see in the chart below, Target could move close to $25 in the aftermath of earnings using the matching lines belief outlined above. It won’t happen overnight. Part B of the matching lines equation is time. The move out of consolidation should be about the same length of time as consolidation. In Target’s case, approximately two months.
Of course, this is not an exact science, rather rules of thumb to consider. Nonetheless, Target Corporation’s (TGT) chart suggests a large move could be in store in the days, weeks, and months following Wednesday’s financial report card.
Bullish investors might consider buying TGT if second quarter earnings and guidance push the stock to a close above $137 and bears might get excited with a close below $130.
Trading earnings is risky and only for the most aggressive speculators who can afford to lose money in short timeframes.
Rich Meyers
1 – https://corporate.target.com/investors/events-presentations
2 – https://finance.yahoo.com/quote/TGT/analysis?p=TGT