Target Jumps 7% on Earnings

I’ve been a big fan of Target ($TGT) for many years. This is a very well-run company that has richly rewarded shareholders. Perhaps the most basic way to go about value investing is to wait for good stocks to run into trouble and then buy them at a discount.

I very nearly added Target to this year’s Buy List. It was only due to uncertainty about the credit-card hacking that scared me away. The shares were as high as $73 this summer and as low as $54.66 earlier this month.

Ideally, I wanted to see TGT fall below $50; plus I wanted to see how the Q4 earnings looked. As we expected, the numbers were rough, but they were not as dire as analysts had expected. Target’s earnings-per-share plunged from $1.47 for last year’s Q4 to 81 cents for this year’s.

I have to give Target credit for handling the crisis well. They’re projecting full-year earnings of $3.85 to $4.15 per share. Wall Street had been expecting $4.15 per share. Unfortunately for those of waiting for a cheaper share price, Target jumped 7% yesterday to crack $60 per share.

This is frustrating but I’ll watch Target run away. Disciplined investing means not chasing stocks.


Posted by on February 27th, 2014 at 12:45 pm

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