Buying and selling shares earlier than quarterly launch

The goal will be for the newest big box retailer to release quarterly results when it announces profits before the bell on Wednesday.

This report follows a blowout neighborhood from Walmart. Grocery sales and e-commerce helped the company top its income statement. Earnings of $ 1.69 per share beat forecast for $ 1.21.

According to Matt Maley, chief marketing strategist at Miller Tobacco, there is good news and bad news for Target to be included in the report.

The bad? Maley said the stock tends to sell off when overpriced.

“On a historical basis, the stock is definitely expensive. At one point sales were at the same level as in 2005 and 2000, right before a fairly significant sell-off occurred,” Maley told CNBC’s “Trading Nation” Tuesday.

In 2005, the last time the stock traded above 1.1 times trailing sales, it fell from a high of $ 60 to a low of under $ 45 in 12 months, a decline of more than 25% corresponds to. It is currently trading at 1.12 times trailing sales.

“The good news, however, is you can’t get a better looking chart than this. I mean, a lot of different stocks have made higher highs and higher lows for a year since the March 2020 pandemic. This has been making them for four years,” said Maley.

In fact, unlike most stocks, Target didn’t hit a lower low during the coronavirus pandemic sell-off last March.

“My point is if it’s a disappointing number, or even in line, it’s going to be a problem,” he said. “If it’s a good number, the chart still looks good and the line of least resistance appears to be higher, at least for the short term.”

Quint Tatro, president of Joule Financial, is optimistic about Target over the long term and has it in the company’s dividend portfolio. However, he would not be a buyer here.

“We’ve shortened the name as it goes up. There’s an old saying, ‘You buy the sizzle and you sell the steak.’ I think Target is probably blowing that [estimate] Number removed. … That being said, my guess is that the stock is sold out. The trade here is to sell Target in the report, “Tatro said in the same interview.

The target beat the market this year – the stock is up 17% compared to the S&P 500’s 10% gain.

Analysts surveyed by FactSet expect a profit share of USD 2.21 for the quarter ending in April after 59 cents in the previous year. Revenue is said to have increased from $ 19.6 billion to $ 21.7 billion.

Disclosure: Joule Financial owns TGT.

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