General merchandise retailer Target (NYSE:TGT) will be reporting results tomorrow before market open. Here’s what to look for.

Target missed analysts’ revenue expectations by 0.8% last quarter, reporting revenues of $25.67 billion, up 1.1% year on year. It was a disappointing quarter for the company, with full-year EPS guidance missing analysts’ expectations.

Is Target a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Target’s revenue to decline 3.6% year on year to $30.77 billion, a reversal from the 1.7% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $2.25 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Target has missed Wall Street’s revenue estimates five times over the last two years.

Looking at Target’s peers in the non-discretionary retail segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Walmart delivered year-on-year revenue growth of 4.1%, meeting analysts’ expectations, and Sprouts reported revenues up 17.5%, topping estimates by 1.7%. Walmart traded down 8.8% following the results while Sprouts was also down 15.6%.

Read our full analysis of Walmart’s results here and Sprouts’s results here.

Inflation has progressed towards the Fed’s 2% goal as of late, leading to strong stock market performance. Recent rate cuts and the 2024 Presidential election's conclusion added further sparks to the market, and while some of the non-discretionary retail stocks have shown solid performance, the group has generally underperformed, with share prices down 7.3% on average over the last month. Target is down 6.8% during the same time and is heading into earnings with an average analyst price target of $143.17 (compared to the current share price of $125.30).

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