Hot Retail stock to watch: Target Corporation (NYSE: TGT)

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Target Corporation (NYSE: TGT) stock has risen > 90% in the year 2019 with company’s adjusted ROIC being 15.1 percent for the trailing twelve months ended November 2, 2019, compared to 13.9 percent in the comparable prior-year period. On the other hand, this year’s digital growth was on top of a 49% comp rise last year. The company continue to benefit from the frequency categories, food and beverage, essentials and beauty, which drive everyday traffic, guest engagement and sales. In the home category, which was annualizing really solid growth a year ago, the company has delivered low-single-digit comp increase in the third quarter, due to strength in the kitchen and home storage categories. Among the frequency categories, the company is benefiting from the strength in beauty and cosmetics, which delivered high-single-digit comp growth in the third quarter. The company also saw high-single-digit growth in the over-the-counter assortment and mid-single-digit growth in household essentials and paper products.

Additionally, at the end of the third quarter, the Company had approximately $0.3 billion of remaining capacity under the $5 billion share repurchase program, which was approved in 2016. In September 2019, the company had authorized a new $5 billion share repurchase program. The company had returned $631 million to shareholders in third quarter 2019, including the dividends of $337 million & share repurchases of total $294 million that retired 3 million shares of common stock at an average price of $99.25.

For the fourth quarter, Target expects comparable sales growth to be in the range of 3 to 4 percent, and Adjusted EPS to be in the range of $1.54 to $1.74. For the full year, the Company now expects Adjusted EPS to be in the range of $6.25 to $6.45, compared with the prior range of $5.90 to $6.20.

The fourth quarter is expected to benefit from Target Circle, which is the new loyalty program that launched nationwide last month. Even though the program is brand new, Target Circle already have more than 35 million members, which made it America’s fastest growing loyalty program. During an 18-month test period, the guests enrolled in Target Circle save more, shop more frequently and had spent 2% to 5% more than guests who weren’t in the program.

Meanwhile, the company had appointed Michael Fiddelke as the Executive Vice President and Chief Financial Officer, effective from Nov. 1.

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