Target Corporation (TGT) and Ross Stores, Inc. (ROST) are poised to deliver robust second-quarter revenue, according to analysts at Tesley Advisory Group. Despite lingering macroeconomic uncertainties, consumers are showing resilience and continuing to spend, fueling optimism for the retailers.
Analyst Joseph Feldman expects Target’s second-quarter revenue to climb by 2% year-over-year, reaching $25.3 billion when the company reports earnings on Wednesday before the market opens. This forecast surpasses FactSet’s consensus revenue estimate of $25.2 billion. Feldman attributes this optimistic outlook to consumers’ focus on value and essential goods, while selectively spending on discretionary items and responding to innovation. Target’s commitment to value is evident in its price reductions and introduction of private brands in new stores.
Meanwhile, Analyst Dana Tesley anticipates a 6.9% surge in year-over-year second-quarter revenue for Ross Stores, reaching $5.28 billion when it releases its results on Thursday after the market closes. This estimate surpasses the revenue consensus of $5.24 billion. Tesley highlights Ross Stores’ consistent strong performance over the past five quarters as a testament to its ability to navigate macroeconomic challenges effectively, despite pressure on some of its core customer base. The company’s efforts to enhance its product mix and drive operational efficiencies further fuel optimism.
In terms of price action, Target’s shares rose 1.67% to close at $144.03 on Friday. Exchange-traded funds (ETFs) tracking the stock also saw gains, including VanEck Retail ETF (RTH), Consumer Staples Select Sector SPDR Fund (XLP), Simplify Next Intangible Value Index ETF (NXTV), Federated Hermes U.S. Strategic Dividend ETF (FDV), and Vanguard Consumer Staples ETF (VDC).
Ross Stores shares dipped slightly by 0.27% to close at $147.40 on Friday. ETFs tracking the stock exhibited mixed performance. VictoryShares THB Mid Cap ETF (MDCP) saw a 0.52% increase, while BlackRock Future U.S. Themes ETF (BTHM) declined by 0.03%. Other ETFs, including IShares U.S. Consumer Focused ETF (IEDI), LG QRAFT AI-Powered U.S. Large Cap Core ETF (LQAI), and Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RSPD), experienced modest gains.
The positive outlook for Target and Ross Stores highlights continued consumer spending despite economic headwinds. Their focus on value, product innovation, and operational efficiencies positions them well to navigate the current landscape and deliver strong financial results.
