He was impressed with the giant Minneapolis retailer’s third-quarter earnings released last month, Barron’s reports.
Target posted adjusted profit of $3.03 a share, up 8.6% from a year earlier and beating Wall Street’s consensus forecast of $2.83 a share.
Revenue totaled $25.65 billion, up 13% from a year earlier and beating analysts’ expectations of $24.78 billion.
But the stock has slid 9% since Nov. 16, a day before the numbers were released. “It’s a great stock and I was happy with the earnings,” Navellier said. “I bought more on the pullback.”
He gives Target an “A” rating based on a statistical evaluation system that measures stock performance relative to its volatility.
Target recently traded at $239.16, down 0.2%. It has climbed 35% so far this year, beating the 25% gain for the S&P 500, as the economic recovery has sparked more shopping.
Morningstar analyst Zain Akbari put Target’s fair value at $159 before the earnings report. He wrote in a commentary afterward that he will likely to raise that by a mid-single-digit percentage.
“Target has adapted to retail digitization, but we believe it faces a highly competitive environment with negligible customer switching costs, exacting pressure to elevate service while holding prices low,” he said.
“Without the scale of Walmart (WMT) – Get Walmart Inc. Report and Amazon (AMZN) – Get Amazon.com, Inc. Report or the differentiated business models that characterize moat-endowed defensive retailers we cover, we expect no-moat Target will be vulnerable to the competitive onslaught.”