Target CEO Brian Cornell appears on CNBC after ringing the New York Stock Exchange opening bell on the morning of November 28, 2014 in New York City.
Target is by far the best performing retail stock of 2019.
After announcing fiscal third-quarter results on Wednesday that crushed Wall Street expectations, Target shares rose 14.1% to close at $126.43. The stock is up 90% this year, outpacing even the strong performances of TJX and Walmart, and is the sixth best performing stock in the S&P 500 Index this year.
“We thought the market was already pricing TGT’s progress more highly, but today’s results (particularly margin expansion) are well above even the most optimistic expectations,” Goldman Sachs wrote in a note to investors. .
Target also raised its full-year earnings outlook ahead of the all-important holiday shopping season, while lowering the cost of processing online orders.
“Overall, we believe that Target’s strategic transformation initiatives – investing in pricing for everyday items, differentiating merchandising with new private labels, revamping stores and investing in digital and delivery, including including Shipt – resonate with consumers,” Telsey Advisory Group wrote in a note to investors.
Options trader Pete Najarian thinks Target shares will climb even higher, telling CNBC’s ‘Halftime Report’ that he expects bigger returns from the company’s investment in private label products. .
“When you look at what’s going on with Target – whether it’s in the grocery space or the rest of the store, and there are five different segments in their store in terms of revenue streams – they have private label everywhere. and it’s something that’s going to be huge for them. It just helps and it’s something that’s going to happen for Target in the future as well,” Najarian said.
–CNBC Michael Bloom and Lawrence Thomas contributed to this report.