Please ensure Javascript is enabled for purposes of website accessibility

Why Target Stock Gained 15% in January

By Demitri Kalogeropoulos - Updated Feb 6, 2018 at 9:01AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This past holiday season wasn't as bad as investors had feared.

What happened 

National retailing chain Target (TGT 0.05%) rose 15% last month, according to data provided by S&P Global Market Intelligence. That was good enough to significantly outpace the 6% gain in the broader market.

TGT Chart

TGT data by YCharts.

Target's stock is still trailing the market over wider time periods, having made up essentially no ground since early 2015.

So what

January's spike occurred as investors grew confident that Target had a solid holiday selling period. The company revealed healthy demand trends early in the month, with comparable-store sales rising 3.4% in November and December, compared to management's earlier target of just a 1% gain.

A woman shopping for detergent.

Image source: Getty Images.

Customer traffic was positive, and Target also enjoyed booming growth in its digital sales channel.

Now what

Shareholders will be eager to find out whether that sales growth corresponded to improved profits or if the retailer instead needed to slash prices to keep inventory moving through the system. That profitability data will be available in Target's full fourth-quarter results, likely due out toward the end of February.

For now, though, the company is on track to post slightly positive growth for 2017 (in the neighborhood of 1%) compared to a 0.5% decline in 2016. Management is hoping to extend that modest recovery into its second year in 2018.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Target Corporation Stock Quote
Target Corporation
$142.45 (0.05%) $0.07

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.