Target’s Merchandising, Brand Initiatives Should Support Traffic, Share Gains, BofA Says

/ / Consumer Discretionary /

Target’s (TGT) merchandising and brand initiatives should help the retailer recapture traffic and share gains after reporting a strong fiscal Q4, BofA Securities said in an emailed note to clients Wednesday. The investment firm raised Target’s price target to $190 from $160 and reiterated its buy rating. Target faces steeper competition in same-day delivery as many large retailers also improved same-day offerings during the COVID-19 pandemic. Still, the company’s gross margin is expected to return to 6% operating margin in fiscal 2028, according to the note. “We continue to expect [gross margin] expansion in [fiscal year 2025] as well as a comp sales & traffic inflection in [fiscal Q2] driven by easing comparisons and the expected success of TGT’s merchandising initiatives,” BofA analysts said. “We expect these benefits to be partially offset by expense deleverage, particularly in Q1 as we forecast a comp sales decline of 4%.”

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Tesla Faces Slowing Demand in Challenging Year, Morgan Stanley Says

/ / Consumer Discretionary /

Tesla’s (TSLA) first-half results could come in below expectations on profitability amid a challenging year for electric vehicles, Morgan Stanley said in a report. “If there was ever a time for Tesla to potentially post a GAAP EBIT loss in the auto business, it may be this year,” Morgan Stanley said, pointing to decelerating EV demand in key markets and an over-supplied China EV market. Morgan Stanley expects Tesla to pull back on price cuts to defend its margins and cash flow in response to falling profitability. “However, we still forecast Tesla FY24 FCF of <$100mm for the year,” the report said. For FY2024, Morgan Stanley cut its GAAP EPS forecast for the company to $0.99 from $1.54 previously. Morgan Stanley reiterated its overweight rating on Tesla while lowering its price target to $320 from $345 amid the “seemingly overwhelming bearish institutional investor sentiment.” “Tesla has significant attributes to be

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CFRA Maintains Hold Opinion On Shares Of Unitedhealth Group Incorporated

/ / Health Care /

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: We lower our 12-month target by $54 to $517, an 18.6x multiple of our 2024 EPS estimate (down by $0.05 to $27.80; we cut our 2025 estimate by $0.13 to $31.36), a premium to managed health care peers but below UNH’s historical average. A significant cyberattack on UNH’s Change Healthcare business (part of Optum) on February 21 continues to disrupt pharmacies, payments, and claims nationwide. Positively, UNH sees 90% of medical claims uninterrupted and expects to reach 95% next week. UNH also views pharmacy claims near normal volume. HHS released guidance from CMS encouraging workarounds such as removing prior authorizations and using alternative electronic data interchanges (EDI). We have seen shares other health care names like HCA Healthcare (HCA 323 ***) and Henry Schein (HSIC 76 ***)

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Kroger’s Earnings Are Coming. Merger Troubles Loom Large. — Barrons.com

/ / Consumer Staples /

By Evie Liu Kroger’s earnings report set for Thursday comes at a time when the largest grocery operator in the U.S. is trying to further consolidate its market share to compete with Walmart and Costco Wholesale. For the fourth quarter ended Feb. 3, Wall Street expects sales to grow by 6.4% from a year ago to $37 billion, according to analysts polled by FactSet. Earnings are estimated at $1.13 per share, up 14% from the year-ago period. Prior to the fourth quarter of 2023, sales were lower than a year ago for two consecutive quarters, even though prices of most goods in grocery stores have gone up. Grocers are facing a tough environment. Consumers are dialing back spending amid inflation, while big-box chains like Walmart and Costco have been gaining market share in food retail as they leverage their size for cheaper prices. Meanwhile, e-commerce competitors like Amazon.com have disrupted

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CrowdStrike Fiscal Q4 Earnings, Sales Rise; Sets Q1 Outlook; Unveils Cloud Service Acquisition;

/ / Technology /

CrowdStrike (CRWD.US) shares surged 23% in premarket activity on Wednesday after the company reported Q4 earnings that more than doubled from a year ago and the soaring revenue was ahead of the consensus. The company reported late Tuesday fiscal Q4 non-GAAP diluted earnings of $0.95 per share, up from $0.47 a year earlier. Analysts polled by Capital IQ expected $0.82. Revenue for the quarter ended Jan. 31 was $845.3 million, up from $637.4 million a year earlier. Analysts surveyed by Capital IQ expected $840.0 million. For fiscal Q1, the company expects non-GAAP diluted EPS of $0.89 to $0.90 on revenue of $902.2 million to $905.8 million. Analysts polled by Capital IQ expect $0.82 and $901.1 million, respectively. For fiscal 2025, it expects non-GAAP diluted EPS of $3.77 to $3.97 on revenue of $3.92 billion to $3.99 billion. Analysts in a Capital IQ survey are looking for $3.76 and $3.94 billion,

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CFRA Maintains Hold Opinion On Shares Of Ross Stores, Inc.

/ / Consumer Discretionary /

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: We raise our 12-month price target by $14 to $138, based on 23.0x our FY 25 (Jan.) EPS estimate and slightly lower than the company’s 5-year average forward P/E multiple of 23.8x. We raise our FY 25 EPS estimate by $0.50 to $6.00 and initiate our FY 26 EPS estimate at $6.40. ROST posts normalized Q4 EPS of $1.82 vs. $1.31, $0.17 above consensus estimates on revenues of $6.02B vs. $5.21B and $208M above estimates. ROST said Q4 revenues and EPS benefitted by $308M and $0.20, respectively, due to the 53rd week in the FY. Q4 operating margin expanded by 165 bps Y/Y to 12.4% due to strong gains in same-store sales and lower freight costs. The company’s board approved a new $2.1B share repurchase program and

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CFRA Lifts Opinion On Shares Of Crowdstrike Holdings To Strong Buy From Buy

/ / Technology /

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: We raise our target price to $406 from $360 on a P/S of 24.5x, above its three-year historical average on its competitive strength and annual recurring revenue (ARR) growth momentum even in a weaker economic climate, using our FY 25 (Jan.) revenue estimate of $3.97B. We lift our FY 25 EPS view to $3.95 from $3.68 and set FY 26’s at $4.94. CRWD reported Q4 revenue of $845.3M, above consensus by $5.34M, while non-GAAP EPS of $0.95 beat by $0.13. The company ended the year strong, adding $287M in net new ARR, up 27% Y/Y, driving Subscription sales and total revenue growth of 33%. We note impressive deal volumes, aided by multi-product new business lands, and displacements of next-generation vendors in significant transactions across a number of

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Target’s ‘Pivot to Growth’ Coming as It Moves Past Recent Issues, Says D.A. Davidson

/ / Consumer Discretionary /

By James Rogers Target’s stock soared following the company’s fourth-quarter results Tuesday Target Corp. is well positioned for growth in its second-quarter as the retail giant gets past the challenges of recent years, such as the 2023 controversy over Pride-themed products, according to analyst firm D.A. Davidson. The discount retailer’s shares soared following the company’s fourth-quarter results to end Tuesday’s session up 12%. The stock is up 3.3% Wednesday. “For all the enthusiasm around TGT’s 4Q23 results, sales are still down year over year and are expected to be again in 1Q24,” wrote D.A. Davidson analyst Michael Baker, in a note released Tuesday. “But, the pivot to growth is coming, most likely in 2Q24 as TGT cycles the start of the worst of the negative comps a year ago, in part due to the Pride issue.” Target (TGT) pulled Pride-themed products from some stores in the run up to June

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