Monday, December 6, 2010

Target (NYSE:TGT) Led by Groceries, Christmas Merchandising

Target (NYSE:TGT) has performed stronger than expected said Barclays (NYSE:BCS), with groceries and Christmas merchandising leading the way.

The good news about groceries is they may maintain margins in the midst of boosted sales.

Barclays said, "Overall, November came in better than our expectations, with the Barclays Capital Broadlines/Dept. Store Same Store Sales Index up 7.0% versus our recently raised expectation for a 4.0% increase. This compares with a 0.3% increase last year...Discounters and warehouse clubs came in largely ahead of our expectations. Target was above our revised estimates (up 5.5%) benefiting from a solid performance in grocery, positive responses to holiday merchandising initiatives, and the REDcard Rewards program, BJ's was above our expectations (+5.0%, or 3.8% ex-gas), and Costco (Nasdaq:COST) was as well (+9%, or 6% ex-gas and FX)."

Barclays maintains an "Overweight" rating on Target, which closed Friday at $59.12, down by $0.53, or 0.89 percent. They raised their price target on them from $60 to $65.

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