Target Stock Up 49% YTD, Room for More?
Target’s stock (NYSE: TGT) has increased around 49% since the beginning of 2021 to levels of $262 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 1.7% in the next one-month (twenty-one trading days) period after experiencing an increase of 1.9% during the last week (five trading days). 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 one day!
While Target was one of the biggest pandemic winners in 2020, it still continues to grow even though consumers have many more shopping options available compared with this time last year. The retailer’s comparable sales soared 22.9% in Q1 to smash the consensus mark of +10.7%. Instead of building out more e-commerce fulfillment centers (as was the need in 2020), Target decided to put its stores at the center of its omnichannel strategy, leveraging them for same-day pickup. This strategy has helped it lay a solid foundation for the company’s growth so far and helped it deliver an operating margin of 9.8% in Q1, ahead of rivals such as Amazon, Costco, and Walmart.
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 2.9%, with a 62.3% probability of a positive return over this period
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 3.0% 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 3.4% 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?
The average return after a rise is understandably lower than after 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 5 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.
It is helpful to see how its peers stack up. TGT Stock Comparison With Peers to see how Target compares against peers on metrics that matter.
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