How Is Target’s Stock Holding Up Since The Spread of Coronavirus Outside China?

Target (NYSE: TGT) stock fell 13% this week and is down by 16% since early February. There has been a continued drop over the last week or so considering the impact that the Coronavirus outbreak and a broader economic slowdown could have on its supply chain. However, going by the trends seen during the 2008 economic slowdown, it’s likely that Target stock will recover and potentially outperform the market as the crisis winds down.

With the drop earlier this week, the stock markets saw their biggest sell-off since the 2008 crisis. There were two distinct trends driving the sell-off. Firstly, the increasing number of Coronavirus cases outside China is causing mounting concerns of a global economic slowdown. Secondly, crude oil prices plummeted by more than 20% after Saudi Arabia increased production. In this analysis, we take a look at how the company’s stock reacted to the economic crisis of 2008 and compare its performance with the S&P 500.

View our dashboard here: 2007-08 vs. 2020 Crisis Comparison: How Did Target Corp. Stock Fare Compared with the S&P 500?

Target Stock versus S&P 500 Over 2020 Coronavirus/Oil Price War Crisis

• Target’s stock declined by about 2% on Monday, March 9th and the stock is down by about 15% since February 1, after the WHO declared a global health emergency.
• The S&P 500 declined by 7.6% on 3/9/2020 and has fallen by 23% since February 1, after the global health emergency was declared by the WHO.

Target Stock versus the S&P 500 During 2007-08 Financial Crisis

• TGT stock declined from levels of around $47 in October 2007 (the pre-crisis peak) to levels of around $21 in March 2009 (as the markets bottomed out) and recovered to levels of about $36 in early 2010.
• Through the crisis, TGT stock declined by as much as 55% from its approximate pre-crisis peak. This marked a sharper decline than the S&P which fell by as much as 51%.
• However, the stock recovered strongly, rising by 73% between March 2009 and January 2010. In comparison, the S&P rose by about 48% over the same period.

Conclusion

While Target’s stock has declined due to the Coronavirus/Oil Price War crisis, going by trends seen during the 2008 slowdown, it’s likely that it could bounce back and grow as the crisis winds down.

For more detailed charts and a timeline of the 2007-08 crisis, view our dashboard analysis 2007-08 vs. 2020 Crisis Comparison: How Did Target Corp. Stock Fare Compared with S&P 500?

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