Target Stock Pauses Despite New Premium Line

The equity is up 40% year-over-year

Digital Content Manager
Sep 2, 2020 at 10:59 AM
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The shares of Target Corporation (NYSE: TGT) are down 0.7% at $149.40 this morning, despite the major retailer introducing new beverage and food items to its exclusive Good & Gather brand, and launching a stemming line of premium items that include small-batch Italian sauces, gourmet pastas, and specialty coffees, according to a CNBC report. 

The security has skyrocketed on the charts over the past couple of weeks. Shares gapped to an all-time-high of $156.06 on August 20, after the stock posted a blowout earnings report. And while TGT has cooled off slightly since then, its 20-day moving average is still serving as support. Longer term, the security sports a healthy 40% year-over-year lead.

Nevertheless, analysts are mostly hesitant towards Target stock, with 10 of the 16 in coverage sporting a tepid "hold" or worse recommendation, while the remaining six sport a "buy" or better.

That pessimism is not echoed in the options pits, though, where calls are popular. In fact, 50,332 calls were exchanged in the past 10 days, compared to 28,057 puts. The resultant call/put volume ratio ranks in the elevated 77th percentile of its annual range, implying a greater-than-usual preference for calls in the last two weeks.

Traders looking to speculate on Target stock's near-term trajectory should consider options. The security's Schaeffer's Volatility Index (SVI) of 19% sits in the 7th percentile of its annual range, suggesting short-term options are pricing in relatively low volatility expectation. In other words, the stock's near-term options are attractively priced at the moment.

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