Target earnings missed the mark after delivering lower than expected profit for the second quarter of 2022.
As of the open of trading on Aug. 17, 2022, Target shares hovered around $174 per share. That's up from a price of about $149 per share at the close of trading a month ago, on July 18, 2022.
If you had invested $1,000 a year ago, you would have lost money since then. Your investment would only be worth about $694 as of Aug. 16, 2022, according to CNBC calculations. Target stock was trading at about $180 per share at the close of market on Aug. 16, 2022.
However, if you had invested $1,000 five years ago, the value of your investment would have increased by a little over 200% and be worth around $3,417 as of Aug. 16, 2022.
If you had given your $1,000 a decade to grow, you would now have about $3,170 as of Aug. 16, 2022.
Amid shifting consumer spending habits, the big-box retailer issued a warning in June saying profits would take a short-term hit as it cancels orders and marks down prices to clear out surplus inventory.
"We've begun to see some deflationary pressure as some retailers, like Target, are stuck with excess inventory due to supply chain delays, seasonal mismatches and changing consumer tastes," says Ted Rossman, senior industry analyst at Bankrate.
The company predicts that sales growth and profit margins are expected to recover in the back half of the year as it makes room for products shoppers are searching for, such as household essentials and school supplies.
This is a big change from a few years ago. During the height of the Covid-19 pandemic, Target's 2020 sales grew by over $15 billion, boosted by a surge of online sales and use of its curbside pickup service. That's more growth in one year than the retailer has experienced over the past decade.
If you're interested in investing in Target or another company, remember: Given the unpredictability of the stock market, you shouldn't attempt to use a stock's past performance to predict how well it'll do in the future.
For most investors, a passive investment strategy makes sense over selecting individual stocks. To that, try investing in an index fund like the S&P 500, which tracks the stock performance of 500 large American companies.
Although the S&P 500 has shrunk by 4.36% compared to last year, the index has grown by 73.59% over the past five years and increased by 202.67% over the past decade.