Question

Target was mentioned in the chapter as a company that has a high degree of seasonality
(and associated working capital issues). Let’s use the Internet to examine
the seasonality. Go to www.target.com. Scroll to the bottom of the page, and
under the “About Target” heading, click on “Investor Relations.” At the top of
the page, hold your mouse over “Investors” and select “Analyst Coverage” from
the drop-down menu. Scroll down to “Analyst Forecasts” and “Actuals.” You
will see historical and projected data for both quarterly and annual periods.

2. Based on the observed data, which of the four quarters (Qs) is normally best for
Target? Why?

3. Which quarter is normally the worst? This may be a close call.

4. Taking the most recent year in which four quarters of data are shown, what
percentage of total fiscal year earnings does the best quarter represent?

Answer 1

Actuals
	Reported EPS	Mean Estimate	Surprise % Change
Oct-17	0.91	0.86	5.9
Jul-17	1.23	1.19	3.47
Apr-17	1.21	0.91	32.39
Jan-17	1.45	1.51	-3.73

Above is the data extracted from www.target.com.

2. If we observe the 4 quaters, last quarter is the best quarter for the Target.

because the variation between estimate and actual is very very near and the surprise chage is also less and negative, which means the company could is ready for more than actuals.

3.Third quarter is the worst as the target estimate is very far from estimate and the suprise change is the highest and amounts to 32%.

4. If we consider 2017 , Annual EPS

Estimated is 5.06 and reported is 5.01 and the highest quarter is the last quarter whihc amounts to 29% of the total EPS.