TGT Earnings Signal (2025-05-20)

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TGT Earnings Analysis Summary (2025-05-20)

# TGT Earnings Options Trade Plan

## 1. Historical Earnings Analysis - **Average Earnings Move**: Over the last 8 quarters, TGT’s stock has moved on average ~5.25% around earnings (source: Grok/xAI). - **Directional Bias**: Mixed – Target has beaten conservative guidance in some quarters but also outright missed in others, leading to no persistent bias. - **Guidance History**: Management tends to guide conservatively, which can create positive surprise on the beat—but macro headwinds (tariffs, boycotts) have increased downside risk. - **IV Crush Pattern**: Historical IV drop of ~30–40% immediately after earnings, meaning call/put premiums decay sharply post-announcement.

## 2. Current Setup Evaluation - **Pre-Earnings Price Action**: • Trading at \$97.99, just below the 50-day MA (\$99.17) and well below the 200-day MA (\$130.90). • Volume (6.58M) is slightly below its 10-day average (7.20M). • RSI is neutral at 54.5. - **Options Chain & Skew**: • Max-Pain = \$98.00, near current price. • Higher open interest in puts at strikes below \$97 (e.g., 5,039 OI at \$88 put) vs. calls. • Nearby 90- and 88-strike puts show strong liquidity and active positioning. - **Implied Volatility**: Elevated vs. historical earnings IV (IV rank ~75%), reflecting an expected move of ~8.7% (ATM straddle at 98 strike costs ~\$8.50). - **Put/Call Ratio**: Skewed slightly towards puts in the OTM strikes, indicating defensive positioning.