Target Corporation (TGT) announced several initiatives on Tuesday to right-size its inventory, including order cancellations and slashing prices. Management also lowered their guidance for the second-quarter operating margin rate to around 2%, from their earlier expectation of meeting the first-quarter’s 5.3%.
Telsey Advisory Group On Target: Analyst Joseph Feldman reiterated an Outperform rating, while cutting the price target to $200. “This outlook reflects soft spending on discretionary products and high inventory across the industry…and elevated supply chain costs, including fuel prices,” Feldman said. “We are disappointed by Target’s lower profit outlook in 2022, but believe this is the right step to resolve the inventory issue and return to a more normalized margin profile in 2023,” he added.
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