Target Corporation (NYSE:TGT) is set to release Q1 results in the coming week. Investors expect to see the company posting strong performance. Operating in the retail industry means that TGT can pass the costs of inflation to the consumers through upward adjustment of prices.
TGT is a consumer defensive stock. This classification means that despite economic cycles the company is able to sustain demand. In the environment of growing inflation, for instance, TGT would still be able to generate significant growth in revenues and possibly even report high profitability.
TGT shares closed the week lower at $199
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TGT shares closed the week at $199.22. The shares have been under significant downward pressure from both the bear market and the market uncertainty created by the invasion of Ukraine by Russia.
The downward trend in the share price is an indication of market correction after the company rallied throughout 2020 and partly in 2021. For investors, the main question is how low the share price is likely to drop and therefore what the investors should do.
TGT shares are likely to shed price to find a new support level at $180. The decline in price is conservatively pegged on how the market develops as well as the factors that affect it.
The analysis recognizes that the decline in share price is not due to company-specific risk. Rather it is due to market risk. The potential resistance for the company is at a price of $220, just above the ten-day moving average of $216.
Summary
Target Corporation is a consumer defensive stock that is expected to benefit from the high rates of inflation. The share price is under downward market pressure since the beginning of the year. Shares may decline further to $180 due to the developments in the Ukraine crisis.
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