Jim Cramer on Nvidia Plus Other Stocks

6. Target Corporation (NYSE:TGT)

Number of Hedge Fund Holders: 49

Cramer mentioned how Target Corporation’s (NYSE:TGT) stock was recently slaughtered and plunged $33 or over 21% on Wednesday.

“I love Target. I think it’s so much fun to shop there. But in this new sell, sit at home and order worldwide, why do I really care how much fun Target is?… Target’s off 14% (for the year), most likely still falling.”

Target (NYSE:TGT) faced a challenging third-quarter performance. The company’s earnings fell short of both revenue and earnings expectations, marking its most significant earnings miss in two years. The results, which were announced on November 20, caused a drop in the company’s stock price. Sales during the quarter grew by only 1.1% year-over-year, and EPS of $1.85 did not meet analysts’ forecasts.

As per the company, this underperformance was attributed to various ongoing challenges, particularly pressures on profitability. The company cited higher costs associated with digital fulfillment and price reductions on thousands of items as key factors contributing to the earnings miss. Furthermore, net earnings in Q3 dropped by 12.1%, falling from $971 million in the same period last year to $854 million.

Target’s (NYSE:TGT) gross margin rate for the quarter was 27.2%, a slight decline from 27.4% in 2023. This decrease was linked to the rising costs of managing higher inventory levels, an increase in digital sales volume, and the ongoing development of new supply chain facilities. Management also noted that the company’s two discretionary categories, Home and Hardlines, experienced continued softness during the quarter. Consumer spending in these categories remained cautious, further contributing to the company’s struggles.