TARGET NOSEDIVES 13% ON EARNINGS AMID EQUITY BLOODBATH

Target is currently trading at 67.06-lower by 13.82% as compared to the previous closing. In Pre-market trading on Tuesday, the stock was traded as low as 13.06% as compared to yesterday’s close. The stock has continued falling after the opening bell.

Target reported mixed third-quarter results before the market open on Tuesday. The retailer’s revenue was slightly above the consensus estimates but earnings fall short of expectations as investments in its supply chain weighed on profits. However, Target maintained its forecast for the full year, and said it’s “better positioned for this holiday season than ever before.”

Target reported adjusted EPS of $1.09-below the market expectations by 3 cents a share. The retailer’s revenue for the quarter was $17.82 billion- above the analyst estimates of $17.80 billion.

Sales at Target stores open for at least 12 months were up 5.1%, slightly short of market expectations for growth of 5.2%. Target’s Q3 gross margin rate fell to 28.7% from 29.6% a year ago, with the company attributing the decline to higher supply chain costs as it fulfills more online orders ahead of the holiday season. The company also said that it has ordered more holiday-related inventory ahead of the fourth quarter, earlier than when it did last year.

On the technical front, the RSI is currently at 18.1% and suggests that the market can move in the downward direction. The current price is below the MA5. The current price is below the lower band of the Bollinger Bands and is heading downwards.

Overall Bias is Negative and short-term trades can be initiated with tight Stop Loss and Profit targets.

TRADE SUGGESTION-STOP SELL AT 67.00 TAKE PROFIT AT 65.00  STOP LOSS AT 68.00

 

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