Target Stock Pivots Lower as Quarterly Profits Disappoint

Year-to-date, TGT is down more than 23%

Digital Content Manager
Aug 17, 2022 at 10:37 AM
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Target Corporation (NYSE:TGT) entered the earnings confessional earlier to report second-quarter profits of 39 cents per share -- much lower than Wall Street's estimates of 72 cents per share. The retail name also missed comparable sales expectations, with heavily discounted apparel, electronics, and home goods failing to draw shoppers struck by record inflation. At last check, TGT is down 2% at $176.56, with results weighing on the broader market.

Options traders are already placing their bets, with 40,000 calls and 42,000 puts across the tape so far, which is 10 times the volume that is typically seen at this point. The most popular contract by far is the is the August 170 put, followed by the 180 call in that same monthly series.

Short-term options traders have displayed a preference for puts of late. The equity's Schaeffer's put/call volume ratio (SOIR) of 1.00 stands higher than 75% of annual readings. This suggests these options players have rarely been more put-biased. 

It's also worth noting security's Schaeffer's Volatility Scorecard (SVS) sits at a 96 out of 100, meaning Target stock  has exceeded option traders' volatility expectations in the past year.

Upbeat earnings reports from Home Depot (HD) and Walmart (WMT) had TGT trading at its highest level since May yesterday. This rally fell short of the $185 level, though, with the security also failing to conquer long-term resistance at the 100-day moving average. Year-to-date, the equity is down 23.2%. 


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