2 Retail Stocks Making Big Moves on Surprising Holiday Sales

URBN is gapping lower after holiday sales data, while TGT gaps higher

by Emma Duncan

Published on Jan 9, 2018 at 10:38 AM

The start of a new year has brought a slew of holiday retail sales data. Today, retail powerhouses Target Corporation (NYSE:TGT) and Urban Outfitters, Inc. (NASDAQ:URBN) are both in focus following their newly released November-December sales figures. Here's a closer look at how TGT and URBN stocks are faring. 

TGT Boosts Fourth-Quarter Profit Forecast 

TGT is up 3% to trade at $69.19 after the retailer said its November-December same-store sales jumped 3.4%. As such, Target boosted its fourth-quarter earnings forecast to a range of  $1.30 to $1.40 per share from its previous estimate of $1.05 to $1.25 per share -- well above the consensus analyst forecast of $1.22 per share.

Target stock has been doing well in recent months, and has lately been the subject of speculation about a potential Amazon takeover. The shares have rallied 42% from their June 2017 lows -- but TGT is now taking on the round $70 level, which marked the equity's low point back in January 2017, just prior to a big bearish gap.

Amid the stock's recent rally, TGT short interest dropped 12.3% during the past two reporting periods, but still represents 8.4% of the stock's total available float. At TGT's average daily trading volume, it would take nearly seven trading days for shorts to cover their remaining bearish bets.

Skepticism still lingers elsewhere, too, per Target's 10-day put/call volume ratio of 1.06 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 92nd annual percentile. Should some of the weaker bearish hands capitulate to the stock's technical and fundamental strength, it could help TGT tackled the looming $70 level.

Urban Outfitters Falls on Negative Retail Store Sales

Urban Outfitters stock has tanked 5.5% to $31.88, after the retailer said same-store sales fell 1% on a year-over-year basis during the 11-month stretch ended Dec. 31. During the two-month November-December holiday period, strength in the direct-to-consumer channel offset negative retail store sales, yielding a 2% increase in same-store sales.

Today's bear gap has URBN testing support at its rising 40-day moving average, which provided key support on pullbacks last October and November. On a year-over-year basis, the shares have added 15.5%, thanks in large part to a 97% rally from their June lows in the mid-teens.

Some bears have started to throw in the towel on URBN lately, as short interest fell 38.6% over the past two reporting periods. That said, short interest still accounts for nearly 16% of the stock's total available float, so there are still quite a few skeptics betting on the retailer to collapse.

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