Target improved by JP Morgan while the retailer is showing off Amazon's "boogeyman"

According to JP Morgan, the big-box retailer Target is safe from the threat of Amazon.

The bank said TARGET should be re-evaluated from the "middle tier" of retail to the best-performing "Amazon Safe" fund in its clbad. J.P. Morgan has upgraded its neutral rating to overweight it and its target price from $ 81 to $ 100.

"In our opinion, TGT does not need to exceed AMZN for a revaluation, but rather to supplant other home and clothing retailers, namely retailers based in malls, department stores and stores. specialized house retailers, for valuations to return to materialize, "Morgan's JP Christopher Horvers said in a note to customers on Thursday. "His growing share of earnings … should help them stand out from their peers in the traditional retail trade and move to the first retail pail."

J.P. Morgan divides retailers into three categories. First, the expensive winners and the best in their category at low risk Amazon. Second, Amazon low-risk companies with doubtful growth and margin prospects and, third, the segment severely impaired. Horvers pleads for Target to pbad from one bucket two to one bucket.

The target target on the top and bottom lines for its first-quarter earnings on Wednesday. Inventory climbed nearly 10%, as same-store sales increased 4.8% to over 4.2%.

Mr. Horvers pointed out that the 4.8% of Target were among the best in the first quarter in the retail sector, with 3% growth for Home Depot, 4.2% for Lowe, 3.4 % for Walmart and 5% for TJX.

The Big Box retailer posted adjusted earnings per share of $ 1.53 on sales of $ 17.63 billion. Wall Street expects earnings per share of $ 1.43 on a turnover of $ 17.52 billion, according to Refinitiv.

Target's online sales grew 42%, mainly due to the selective collection of online sales, which Amazon does not offer.

"Given its many execution options (free shipping in two days, restocking, streetside pickup and warehouse until the very day of Shipt), we are less afraid that the AMZN's boogeyman will come back to haunt TGT. while retail sales are moderate, "said Horvers.

J.P. Morgan compared Target's revaluation at Walmart in 2017.

"Although this is ahead of its historical average of 14x for the 2001 fiscal year, we expect the market to reconsider its view of TGT," said Horvers. "In the end, the evolution of the market point of view on WMT resulted in a substantial revaluation in 2017 and we expect a similar move for TGT in 2019."

Target's shares have risen nearly 9% in the last 12 months and more than 17% since the beginning of the year. Amazon shares have increased 16% over the last year and 23% since the beginning of the year.

The stock was slightly lower in pre-market trading on Thursday.

– with report of Michael Bloom and Lauren Thomas.