The protective put we purchased to hedge our Target (TGT) bull call spread is on track to expire worthless.
Target beat revenue estimates for its holiday quarter, reporting sales of $31.4 billion, up about 1% year over year. Earnings per share trounced expectations of $1.40, coming in at $1.89.
However, management’s forecast was not upbeat, calling for a low-single-digit decline to low-single-digit increase in same-store sales for 2023 on a slowdown in consumer discretionary spending. Target’s full-year EPS guidance of $7.75 to $8.75 was well below the $9.23 Wall Street was forecasting.
Despite this, TGT has outperformed most retail stocks this year. We are sticking with the position.
Note: No action is needed on the TGT Jan 2024 150 Call/ Apr Monthly (4/21) 175 Call Spread at this time.
Current Stock Price: $159.82
Cost Basis: $42.60
Action: Watch the TGT Mar Week Two (3/10) 152.50 Put expire worthless