Why Target Stock Dropped After Earnings Tuesday

Core Insights - Target reported a fiscal fourth-quarter earnings per share of $2.41, exceeding analyst expectations of $2.25, with sales reaching $30.9 billion compared to the forecast of $30.4 billion [1][2] - Despite the earnings beat, Target's stock fell by 5.2% following the announcement, indicating investor concern over declining sales and profits [1][3] Financial Performance - Same-store sales increased by 1.5% year over year, but total quarterly sales declined by 3% and net profit decreased by 19% due to a shorter fiscal period in 2024 [2][3] - For the full fiscal year, net sales fell by 1% to $106.6 billion, and net profit also decreased by 1% to $8.86 per share [3] Future Guidance - Target anticipates a 1% sales growth in 2025, with per-share profits projected to rise between $8.80 and $9.80, indicating potential earnings growth of up to 5% [4][5] - The stock is currently valued at 12.4 times the current year's earnings, with a dividend yield of 3.7%, suggesting it is not an obvious buy but also not a compelling sell [6]