Unpacking Target Stock's Post-Earnings Bear Gap

When we last checked in on Target Corporation (NYSE:TGT) the Walmart (WMT) and Amazon (AMZN) rival was getting blitzed by call traders. A little more than 24 hours later, we're going to unpack the retailer's corporate report a little more.

Target Corporation announced its fourth quarter and full year of 2020 results on March 2. In its full year report, TGT primarily highlighted growths in sales, digital sales, and market share. Target gained approximately $9 billion in market share this year and grew revenues by more than $15 billion, which was greater than the company's total sales growth over the prior 11 years. Additionally, Target's digital sales increased by nearly $10 billion in 2020 as a result of the company's same-day delivery services growing 235% during the pandemic. TGT ended the year of 2020 with total revenues of $28.3 billion and an eps of $9.42, marking 21.1% revenue growth and 47.4% earnings growth compared to last year.

Target also emphasized a 20.5% sales growth for the fourth quarter of 2020, reflecting store sales growth of 6.9% and digital sales growth of 118%. Moreover, TGT's operating income was $1.8 billion this quarter, up 53.2% from $1.2 billion in 2019. Target stock also reported an earnings per share (EPS) of $2.67 for the fourth quarter of 2020, beating analysts’ expectations by $0.13. This earnings beat marks four consecutive earnings beats for TGT.

However, all the positive results were not enough to prevent the Target stock from falling 6.8% yesterday. So despite all of the encouraging numbers referenced above, the stock was ultimately done in by not providing sales and earnings guidance at all for fiscal 2021 due to the continued uncertainty surrounding the COVID-19 pandemic.