|
|
|
ONLINE FEATURES
Book Reviews
BW Video
Columnists
Interactive Gallery
Newsletters
Past Covers
Philanthropy
Podcasts
Special Reports
BLOGS
Auto Beat
Bangalore Tigers
Blogspotting
Brand New Day
Byte of the Apple
Economics Unbound
Eye on Asia
Fine On Media
Green Biz
Hot Property
Investing Insights
Management IQ
NEXT: Innovation
NussbaumOnDesign
Tech Beat
Working Parents
TECHNOLOGY
J.D. Power Ratings
Product Reviews
Tech Stats
Wildstrom: Tech Maven
AUTOS
Home Page
Auto Reviews
Classic Cars
Car Care & Safety
Hybrids
INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads |  |
SEPTEMBER 12, 2005
Taking Aim At Target  As oil continues its rampage, squeezing shoppers' budgets, the outlook for retailers looks bleak. In fact, when oil hit $70 a barrel on Aug. 30, retail stocks had the second-worst showing among all industry groups in the Standard & Poor's 500-stock index. "We think investors should be increasingly selective with retail," says Mark Miller of brokerage William Blair. Target (TGT
) dropped $1.58, to 54.14, that day and a further 40 cents the next day, even though the S&P 500 rose 1%. But the sell-off may be a good time to buy in. Miller expects same-store sales to increase by 5.8% for 2005, vs. a 5.3% gain last year, at a time "that is shaping up to be pretty challenging for everyone else." Target, with its 1,351 stores, is a discounter that appeals to middle- and high-income types, so oil prices aren't such a hit to the wallet, says Miller. The company's ad campaign resonates with shoppers, he adds, as do partnerships with high-end brands such as garden-furniture maker Smith & Hawken (SMG
) and designers like Isaac Mizrahi. Target also has strength in procurement and factory management with its foreign suppliers. Miller's earnings estimate is $2.68 a share for 2005 and $3.08 for 2006. He doesn't issue price targets. Another bull, Bill Dreher of Lehman Brothers (LEH
), has a 12-month price target of 68.
Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.  By Mara Der Hovanesian
BW MALL
SPONSORED LINKS
Get BusinessWeek directly on your desktop with our RSS feeds.
Buy a link now! Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
 Copyright 2005, by The McGraw-Hill Companies Inc. All rights reserved.Terms of Use | Privacy Notice |
Printer-Friendly Version