Executive Summary

• Target reported flat 4Q18 total revenues of $22.98 billion, with sales below consensus, however, the year-ago quarter included one extra week ($1.2 billion) of sales. Adjusted EPS was $1.53, beating consensus by a penny. Comps grew 5.3%, beating consensus. Digital sales grew 31%.
• For 2019, Target expects a low- to mid-single-digit increase in comps, a mid-single-digit increase in operating income and EPS of $5.75-6.05 (up 7-12%), above consensus of $5.61.
• Target held an upbeat, well-attended investor meeting in New York City, in which management illustrated the successes of investments it began in 2016 in addition to its “durable financial model,” which calls for sales growth in the low- to mid-single digits, leading to earnings per share growth in the high-single digits.