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Target (TGT) is scheduled to report results of its second quarter before the market open on Wednesday, August 21. The company will host its earnings conference call at 8 am EST. What to watch for:

GUIDANCE: In May, Target forecast Q2 adjusted earnings per share of $1.95-$2.35 and comparable sales flat to up 2%. Analysts currently expect EPS of $2.18. At the time, Target backed its fiscal 2024 adjusted EPS view of $8.60-$9.60, with comparable sales flat to up 2%. Analysts currently expect FY24 EPS of $9.28. Target said the company would not be satisfied until it sees positive comps, but that it would be facing continued uncertainty in the near-term.

Amidst an uncertain consumer environment and a still-challenged discretionary backdrop, Oppenheimer is taking a more conservative stance and moving to the lower end of management's EPS guidance ranges for both Q2 and the full year. For Q2, Oppenheimer now looks for a flattish comp vs. guidance of 0%-2%. Going forward, the firm continues to see the potential for a multi-year profit recovery, but now assumes a return to healthier levels of comp growth has potentially been pushed out a bit further. Wells Fargo expects a solid Q2 from Target and it's cheap, but the macro is likely to remain an overhang. Q2 should be fine as the 1%-2% comp bar, continued margin progress, and consensus EPS look achievable, Wells adds. The issue is the second half of the year outlook given Target's exposure to the consumer and calendar headwind.

STIFEL SURVEY: Stifel lowered the firm's price target on Target to $147 from $170 and kept a Hold rating on the shares. The firm's survey showed U.S. consumer spending intentions remain positive but have weakened considerably over the last six weeks compared to year-to-date averages through late June. The survey showed year over year declines in back-to-school spending intentions, with spending intentions weakening across nearly all income levels, Stifel said.

'TACTICAL UNDERPERFORM': Evercore ISI added Target to the firm's Tactical Underperform List ahead of the Q2 earnings report, with near-term downside toward the low to mid $120's. While Target's Q2 results are likely to be at or above Street estimates, comp and traffic trends appear to be moderating into Q3 when they should be improving, the analyst told investors in a research note. The firm, which has an In Line rating and $158 price target on the shares, believes the second half outlook is likely to be cautious with guidance reduced toward the midpoint of full year EPS of $8.60-$9.60.

CARD DATA: Truist raised the firm's price target on Target to $156 from $153 and keeps a Hold rating on the shares as part of a broader research note on the Consumer sector. Truist Card Data continues to suggest that while most consumers outside of low-income households are in "bend but don't break" mode, sales have continued to soften at the margin for most, the analyst said. Truist added that Target sales have shown a solid acceleration vs. the exit rate from Q1 as comparisons significantly eased.
 

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