How to Handle a Lofty Target

Since the end of 2012, shares of discount retailer Target (TGT) have run up 19.2%, or more than $11. Its trailing price-to-earnings ratio comes to 15.4x -- far more similar to its P/E right before Target's last two significant selloffs vs. the three most recent times when buyers were getting in cheaply.

Earnings per share have grown only moderately since fiscal 2010 (ended January 2011), rising only a cumulative 16.5% over the past two years. This year's consensus estimates center on growth of just 1% to 2%. Target's extended price, combined with low expectations for fiscal 2013, make another large up move unlikely....214 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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