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The rally has also raised the bar heading into quarterly results.Author of the article: You can save this article by registering for free here. Or sign-in if you have an account.8b48]]7y5g}b998vi9e907xf_media_dl_1.png Bloomberg(Bloomberg) — Target Corp. has quietly emerged as one of this year’s hottest retail stocks, outperforming many staples and big-box peers. The rally has also raised the bar heading into quarterly results.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorShares have surged 26% this year, on pace for their first annual gain in five years. But as impressive as the rally may be, Target’s stock has clawed back only about a fifth of the losses over the prior four years and at about $123 a share is a far cry from the all-time high of $266 back in 2021.“The results will be better and we’re early in the turnaround, but the setup in the short term, heading into the earnings report, is a little bit tricky because expectations are higher,” D.A. Davidson analyst Michael Baker said of Target, which reports Wednesday before the market opens.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againAnalysts have grown more optimistic regarding the company’s short-term outlook: The average first-quarter adjusted earnings per share estimate for Target has risen 5.7% over the past month, according to data compiled by Bloomberg. Revenue expectations for the same period are up 1.2%.Target shares are often volatile following earnings, with moves of 5% or more for three of the last four reports.The improved stock performance reflects growing investor confidence that Target’s turnaround efforts are starting to bear fruit after years of missteps and disappointing results. The challenge will be sustaining the current momentum in the face of worsening consumer sentiment and higher energy prices due to the Middle East conflict.The retailer is seeking to reinvigorate operations under its new chief executive officer, Michael Fiddelke, after a three-year streak of weak sales. Fiddelke, a company veteran who started as an intern in 2003 and took the reins in February, vowed to improve merchandise, refresh stores and integrate technology more effectively. The Minneapolis, Minnesota-based company is revamping assortment across beauty, baby, apparel, home and food — categories executives have identified as key areas for the business. It’s partnering with brands like Parke and Pokémon, and spending billions of dollars on store enhancements, staff training and technology.There’s still a wide performance gap between Walmart Inc. and Target, with the former holding the crown as the world’s largest traditional retailer thanks to a focus on low prices, household necessities and investments in technology. Walmart is also carrying more premium brands and making inroads with wealthier shoppers.Yet, there are signs that Target’s rebound could be durable. Visits to its stores during the first quarter were up 5.1% from the year prior, marking the chain’s first positive visit growth in more than a year, according to data from Placer.ai. The firm also notes traffic in April rose 5.5% from the previous year.“The quarter looks great and traffic appears to be strong, but underlying all of this is the fact that the comparisons are just exceptionally easy,” said John San Marco, an analyst at Neuberger Berman. “From here, the bar will start to get more difficult.”A Target spokesman declined to comment citing quiet period ahead of earnings report.Consumers in FocusOptimism around Target’s revitalization initiatives is being tempered by deteriorating consumer sentiment from the Iran War.Some companies have cautioned that Americans are showing signs of pulling back due to concerns about inflation, especially gas. And while prices of consumer products have largely held steady as operators move through existing inventory, that could change depending on the duration of the war. All of these factors could especially pressure demand for discretionary goods like furniture, apparel and electronics.Target’s results will be compared with those from Walmart on Thursday. Other retailers reporting this week include Lowe’s Cos Inc., TJX Cos Inc., and BJ’s Wholesale Club Holdings Inc.“For a couple of years now the big box retailers have repeatedly described consumers as being ‘value seeking,’” said Michael O’Rourke, chief market strategist at JonesTrading. “This illustrates a consumer base that is stressed but has not yet cracked. The concern today is that the rise in energy prices will push consumers over the tipping point.”—With assistance from Janet Freund. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. 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