Golden Cross Signals Bullish Momentum
Among traders, the sighting of a Golden Cross on a dividend king stock has stirred bullish sentiment. This stock, a long-standing dividend payer with an average annualized dividend growth rate of 11.44% over five years and a year-over-year TTM dividend growth rate of 5.80%, has now been adorned with a golden laurel – and the name behind this prowess is none other than Target Corp (TGT), a stalwart hailing from the state of Minnesota, and the seventh-largest retailer in the U.S. gracing the S&P 500 Index.
On the most recent trading day of Jan. 18, the simple moving averages of Target’s stock price completed a feat known as a Golden Cross, a technical signal urging traders to contemplate bullish positions.
The occurrence of a 50-day Simple Moving Average (SMA) crossing over the 200-day SMA, suggests market sentiments tilting increasingly in favor of the bulls, as they pave the way for opportunity.
Despite standing tall in the competitive retail landscape, Target secures its position through an array of affordable and diverse products, fortified by robust digital strategies. With an extensive footprint of over 1,900 stores, the company champions a resilient omnichannel approach, bolstered by a strong private labels portfolio and an enviously wide customer base.
However, the landscape is not without its financial concerns, with tight dividend coverage and pressures on cash flow casting shadows. Yet, the company’s unwavering record of over 50 years of dividends, coupled with a moderate forward price-to-earnings (P/E) ratio of 16.9x, alongside consistent share buybacks, shines a light on Target’s potential for sustained growth. This potential is bolstered by strategic initiatives and an investor-friendly ethos.
Analyst Endorsements Underpin Market Sentiments
Buoying this sentiment further, recent analyst reports have sounded a bullish tone for Target. On Jan. 16, Morgan Stanley upgraded the stock to Overweight from Equal-Weight, with a raised price target of $165 per share. Prior to this, on Jan. 4, Wells Fargo’s George Kelly maintained his Overweight rating on the stock while adjusting the price target upward to $155 per share. These developments echo a resounding note of confidence in Target’s future prospects.
The confluence of a bullish technical setup, fundamental strength, and analyst convictions collectively position Target stock favorably in the current environment.
TGT Price Action: As of the publication time on Friday, Target stock was trading at $138.21.