What’s Happening With Target’s Stock?

by Trefis Team
-6.51%
Downside
205
Market
192
Trefis
TGT
Target
Rate   |   votes   |   Share

Target’s stock (NYSE: TGT) has declined more than 3% over the last five days to levels of around $187 currently. But will the company’s stock see higher levels over the coming weeks, or is a decline in the stock imminent? According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price, returns for Target stock average around 3.0% in the next one-month (twenty-one trading days) period after experiencing a 3.4% decline in a week (five trading days). Notably, the stock is very likely to outperform the S&P500 over the next month (twenty-one trading days), with an expected excess return of 2%.

But how would these numbers change if you are interested in holding TGT stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis machine learning engine  TGT stock chances of a rise after a fall. You can see the chance of recovery over different time intervals of a quarter, month, or even just 1 day!

MACHINE LEARNING ENGINE – try it yourself:

IF TGT stock moved by -5% over five trading days, THEN over the next twenty-one trading days, TGT stock moves an average of 2.6%, which implies an excess return of 2.2% compared to the S&P500.

More importantly, there is a 62% probability of a positive return over the next twenty-one trading days and a 59% probability of a positive excess return after a -5% change over five trading days.

Some Fun Scenarios, FAQs & Making Sense of Target Stock Movements:

Question 1: Is the average return for Target stock higher after a drop?

Answer: Consider two situations,

Case 1: Target  stock drops by -5% or more in a week

Case 2: Target stock rises by 5% or more in a week

Is the average return for Target stock higher over the subsequent month after Case 1 or Case 2?

TGT stock fares better after Case 2, with an average return of 2.6% over the next month (twenty-one trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 3.0% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next twenty-one trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how Target stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer: If you buy and hold Target stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and the Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For TGT stock, the returns over the next N days after a -5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

You can try the engine to see what this table looks like for Target after a larger loss over the last week, month, or quarter.

Question 3: What about the average return after a rise if you wait for a while?

Answer: The average return after a rise is understandably lower than a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although TGT stock appears to be an exception to this general observation.

TGT’s returns over the next N days after a 5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

It’s pretty powerful to test the trend for yourself for Target stock by changing the inputs in the charts above.

While Target’s stock may have declined so far, 2020 has created many pricing discontinuities that can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Target vs Anthem.

See all Trefis Price Estimates and Download Trefis Data here

What’s behind Trefis? See How It’s Powering New Collaboration and What-Ifs For CFOs and Finance Teams | Product, R&D, and Marketing Teams

Rate   |   votes   |   Share

Comments

Name (Required)
Email (Required, but never displayed)
Be the first to comment!