Target Stock Takes a Breather Ahead of Q1 Earnings

The security has a positive history of post-earnings reactions

Assistant Editor
May 18, 2021 at 1:47 PM
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The shares of Target Corporation (NYSE:TGT) are dipping today, last seen down 1.4% at $206.96. Fresh off a May 10, all-time high of $217.39, TGT has shed roughly 2% this week, as the retailer prepares for its first-quarter earnings report, which is due out before the open tomorrow, May 19. Below, we will dive deeper into how Target stock has been faring ahead of the event, and what investors should expect for the equity moving forward.

On the charts, Target stock has handled much of the past year with ease. The equity's most substantial pullback in March was contained by the 150-day moving average, and the security now boasts a 65.7% year-over-year  lead. What's more, TGT is receiving support from the 40-day moving average, which coincides with the $207 area.

TGT Chart 2 May 18 

Meanwhile, options bears are blasting TGT today. Despite calls outnumbering puts on an overall basis, puts are still running at three times what is typically seen at this point, with 15,000 across the tape so far. The May 230 call is attracting the most attention, followed by the 210 call in the same monthly series, with positions being opened at the latter.

Looking back, Target stock has seen mostly positive returns after its earnings reports over the past two years. In fact, five out of eight of these next-day sessions were higher, including an impressive 12.7% pop in August 2020. The stock averaged an 8.7% swing, regardless of direction, the day after its last eight reports. This time, the options pits are pricing in a similar 8.3% move.

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