Price cutting is pressuring the retailer's margins
Joining the growing list of retailers that are updating their guidance for the fourth quarter is Target Corp (NYSE:TGT). The company expects comparable store sales to rise 1.5% for the quarter, well above previous estimates, but maintained its profit forecast as price cutting to appease cash-strapped consumers pressured margins. At last glance, TGT is down 3.2% to trade at $130.29
The shares are on track for their fourth-straight decline, looking to extend their nine-month decline of 23.1%. TGT had been climbing since a bear gap pushed them to a Nov. 20, 52-week low of $120.21, but appears to have found resistance at $144. Today's losses may also place the equity below recent support from its 20-day moving average.
Puts have been more popular than usual in the options pits. TGT's 10-day put/call volume ratio of 1.08 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 95% of annual readings.
Drilling down to today's options activity, 31,000 calls and 16,000 puts have already crossed the tape, which is 4 times the volume typically seen at this point. The January 2025 130 put is the most popular contract, but positions are being opened at the 128 call in that series, with both positions expiring tomorrow.