Takeovers & Earnings To Watch Out For

Big-box retailer Target (NYSE:TGT) has reported its fiscal Q4 earnings results ahead of the bell today, with results largely in-line with expectations. Earnings of $1.53 per share met the Zacks consensus estimate, while quarterly sales of $22.98 billion eked out a beat from the $22.96 billion anticipated. Shares rose on the news 6%, but have ebbed slightly at this hour.

Comps also slightly surpassed estimates to 5.3% year over year, with digital sales up 30+% in the quarter. But the big story on Target’s report is in full-year guidance: a range of $5.75-6.05 per share is well ahead of the $5.39 in the Zacks consensus estimate. Prior to the release Target shares held a Zacks Rank #3 (Hold) rating with a Style Score (Value - Growth - Momentum) of A.

Kohl’s (NYSE:KSS) also surprised to the upside this morning, with earnings of $2.24 per share outpacing the $2.17 consensus estimate. Revenues of $6.82 billion pushed past the $6.79 billion analysts were looking for. Full-year guidance was also the story behind Kohl’s 5.5% rise in pre-market trading, with a range of $5.80-6.15 per share well out in front of $5.54 per share in the Zacks consensus. Kohl’s was also a Zacks Rank #3 with a Style Score of A.

Weird Scenes Inside the Gold Mines

After a hostile takeover bid was flatly rejected yesterday — Barrick Gold (NYSE:GOLD) had gone after Newmont Mining (NYSE:NEM) for $18 billion — talks between the two gold miners have augmented into a new reality this morning: Newmont has countered with a joint-venture pitch to share assets with Barrick in the northern regions of Nevada, where both companies operate. It is but the latest plate-shift in an industry that has aggressively undergone concentration of powers.

When Barrick bought South Africa-based Randgold (LON:RRS) last year for $6.5 billion, it brought along Randgold’s CEO Mark Bristow, who took over at the helm of Barrick at the start of 2019. The acquisition also triggered Newmont to act in kind, and Barrick’s competitor bought Goldcorp for $10 billion, placing the new Newmont at the top of all gold mining companies.

This is why Barrick’s $18 billion for Newmont was unlikely to move forward from the beginning: Newmont’s market cap of $20 billion is not only higher than the takeout price, but $5 billion higher than Barrick’s market cap. That the two companies’ mines in Nevada are so close together, a merger between these assets may make more sense, depending on how a deal is structured.