Jump to content

Where next for Target shares after worst plunge since 1987 crash?


Recommended Posts

Target’s 25% share price fall, the worst one-day decline since 1987’s Black Monday, dragged other retailers down and hit the broader market.

RetailSource: Bloomberg
 
 Axel Rudolph | Market Analyst, London | Publication date: Thursday 19 May 2022 

Target widely misses estimates

The US behemoth retailer Target widely missed analyst estimates as a surge in costs squeezed margins in the first quarter (Q1).

When the company cut its profit forecast it triggered the sharpest one-day decline in its share price since the Black Monday 1987 crash.

Target’s supply chain constraints, rapidly rising fuel, and freight costs in Q1 amid a shift in consumer shopping habits which led to a sharp slowdown in apparel and home goods sales, led the company to mark down bloated inventories and lower its forward guidance.

The retailer stated that it would have to spend $1 billion more on freight in 2022 than it expected to at the start of the year as widespread Covid lockdowns in China created congestion at Asian sea ports, and rising petrol prices have driven up the cost of trucking.

Added to that, Target ordered too many bulky home goods which US consumers bought less of, and which are especially costly to ship and store because of their size and weight, forcing the company to rent additional warehouse space in the tightest warehouse market on record to store its excess inventory before selling it off at highly discounted prices to free up storage space.

All of the above led to Target’s net income dropping by 52% in the first quarter of 2022 compared to the same period in 2021 and a near 25% drop in its share price on Wednesday.

Where to next for Target’s share price?

Year-to-date the Target share price has declined by 30%, the majority of which yesterday, with it falling to the 61.8% Fibonacci retracement of the 2020-2022 bull market at $155.22 before consolidating in the short-term.

Target weekly chartSource: ProRealTime

 

Over the next few days this year’s decline is expected to continue with the August 2020 high at $152 representing the first downside target, followed by the October 2020 low and the 200-week simple moving average (SMA) at $146.90 to $144.83. In this area the share price may find support.

On the daily chart a huge gap has been formed between Tuesday’s low at $209.27 and yesterday’s high at $167.77 which is not expected to get filled for several months at the very least.

Target daily chartSource: ProRealTime

 

In case of the share price stabilising in the short-term, the 50% retracement of the advance from the March 2020 pandemic low and the November 2020 high at $176.40 to $177.43 may act as initial resistance.

If not, the next higher February low at $183.07 is likely to be more solid resistance and is expected to cap, if reached at all.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      21,261
    • Total Posts
      90,870
    • Total Members
      41,373
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    vishesh
    Joined 06/02/23 00:17
  • Posts

    • SP500 | NASDAQ | Russell 2000 | Dow Jones: Elliott Wave Technical Analysis Content: SP500 - NASDAQ 100 - RUSSELL 2000 - DOW JONES Summary Bullish Impulse wave structure moving higher Elliott Wave (iv) of iii) of 3 of (3) of 1) Strategies Holding long Video Chapters 00:00 S&P500  11:33 NASDAQ 100 (NDX) 12:26 Russell 2000 (RUT) 13:23 Dow Jones (DJI) 19:16 TRIAL Buy 1 Month Get 3 Months Analyst Peter Mathers TradingLounge™ Australian Financial Services Licence - AFSL 317817 Source: tradinglounge com  
    • Q: How can I experience the Fairy Cat metaverse? A: Debuting in January 2023, Fairy Cat is one of the most popular crypto metaverse games. While earlier games (World of Warcraft, League of Legends, Destiny 2) either precede blockchain technology or have not integrated it into their games at all, more recent metaverse iterations - such as FairyCat - integrate metaverse games and blockchain platforms. These so-called "crypto metaverse" games use blockchain technology to achieve encrypted in-game cash, play-to-earn (P2E) and non-fungible tokens (NFT), decentralization and other functionality to bring extraordinary benefits to metaverse games. relevant impact. You don't need to be a crypto expert to play this innovative game, although a little crypto knowledge is helpful to take advantage of all the functionality of FairyCat. Start exploring Fairy Cat: 1. Go to the Fairy Cat website to learn more about the game's currency models, then download the Metamask wallet. 2. Start earning money by opening the game in the Metamask wallet browser. At this point, the game will connect to your wallet account. Don't worry that this game will steal your wallet balance, because it doesn't need your account authorization data, it just needs your wallet data. 3. Once you are in Fairy Cat, you can go through a money transfer tutorial to learn the basic controls. Then you can earn money in the following three methods: Method 1: Adopt a cat to help you find treasures, and you can make profit after selling the treasures. Method 2: Synthesize an LV1 elf cat through 5 elves, and then sell the LV1 elf cat to earn money. This can be understood simply as using 5U to earn 10U (50% probability), and you can buy items to increase the synthesis rate. Method 3: Invite your friends to play the game. After your friends earn money, you can also get commission income. The income is very high.
    • HI,  Please if any IG supporting staff can answer the questions below? 1. in the upcoming AMC/APE vote on 14 March 2023, can shareholder that hold AMC and APE at IG able to make a vote? I also have AMC and APE at IBKR and they did send out a notification to inform me that I can do proxy vote. Will IG do the same? 2. the upcoming vote is to determine APE covert back to AMC then do reverse spilt. Last year after APE issued, IG staff told me that they have to move APE to share dealing account from my ISA account as ISA is not eligible to hold APE (which is completely unbelivable, my APE at AJ Bell and HL are still sitting in ISA account). Anyway, if the conversion and reverse spilt is going to happen, will IG move my APE back to ISA account for the corporate action? Many Thanks
×
×
  • Create New...