Target (TGT) is scheduled to report results of its third quarter before the market open on Wednesday, November 16, with a conference call scheduled for 8:00 am EDT. What to watch for:

GUIDANCE: In August, Target said it still expects 2022 revenue growth to be in the low- to mid-single digit range. "While the company is planning cautiously for the remainder of the year, current trends support the company's prior guidance for full-year revenue growth in the low- to mid-single digit range, and an operating margin rate in a range around 6% in the back half of the year," Target said in a statement at the time. Target CEO Brian Cornell said he expected the Q3 operating margin rate to be "well below" previous years, but added that the company was "in a much better position" heading into the fall season.

Deutsche Bank analyst Krisztina Katai believes the print will at best be in line, combined with a likely Q4 guidance cut given softer discretionary demand trends and what appear to be ongoing clearing activity at the retailer.

'TACTICAL UNDERPERFORM': Evercore ISI analyst Greg Melich added Target to the firm's "Tactical Underperform" list ahead of its Q3 earnings report, as he sees Target posting a "miss and lower" report. If he is right on Q3, his sense is that "it will be hard for management to guide 4Q to expanding EBIT margin in light of ongoing softer discretionary demand trends and further clearance activity," Melich tells investors. He thinks "a reasonable near-term floor is $140-$145," added Melich, who has an In Line rating and $165 price target on Target shares.

'WARNING SHOT': Morgan Stanley analyst Simeon Gutman believes retail sales may have inflected negatively in the last several weeks and that the backdrop "appears to be weakening," calling Amazon's (AMZN) holiday quarter outlook a "warning shot for discretionary retailers." The analyst thinks Target has more second-half risk than Walmart (WMT).

BULLISH STANCE SUPPORTED: Jefferies analyst Corey Tarlowe said that amid a "challenging macroeconomic backdrop," a "subdued" valuation and improvements in supply chain and inventory positioning support a bullish stance on Target. The analyst believes second half 2022 risk exists but says 2023 will likely realize margin improvement. Target is better positioned than the broader retail set at present, contends Tarlowe.

HIRING AND EXPANSION: Target announced plans to hire up to 100,000 seasonal team members for the holiday season. In addition, the company announced new larger-format stores that are more than 20,000 square feet larger than the chain average. While the retailer will continue to open stores of all sizes, it will focus on this larger footprint in the next few years, it said, adding that starting in 2023, more than half of Target's approximately 200 full store remodels and almost all the retailer's approximately 30 new stores will include elements of the new design.

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