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The analysts, who have a Neutral rating and a $130 price target on the stock, said their view was, in part, based on the deceleration in TGT traffic data in late May that continued through June.
“We model sales down 5.5% vs consensus of -2.1% and guidance of sales centered around – LSD. We model EPS of $1.27 vs consensus of $1.54 and guidance of $1.30-1.70,” wrote the analysts.
“Weak 2Q top-line trends will also cause mgmt to lower the high end of their annual EPS guidance range as they will likely have more modest top-line assumptions for 2H. The stock is down about 15% since the 1Q call, driven by weaker traffic trends, so weaker results in 2Q are largely expected,” they added.
They noted that the magnitude of the 2Q sales decline and 3Q-to-date sales/traffic trends have the potential to be a negative surprise to the market.
