Shares of Target Corp (NYSE:TGT) edged lower in early trading on Thursday, despite the company Monday reporting upbeat first-quarter results.
Here are the key analyst insights:
- BofA Securities analyst Christopher Nardone maintained an Underperform rating and price target of $110.
- JPMorgan analyst Christopher Horvers reiterated a Neutral rating and price target of $129.
- BTIG analyst Robert Drbul reaffirmed a Neutral rating on the stock.
Check out other analyst stock ratings.
BofA Securities: Target's new merchandising initiatives resulted in some sales traction during the first quarter. However, it is too early to conclude whether this improvement was company-specific or industry-driven. The discretionary segment is likely to remain "very competitive," and pricing pressure could continue, Nardone said.
Target's gross margin drivers in the second quarter could remain the same as the first quarter, including:
- Continued opportunity on full-price sell-through
- Ongoing benefits from advertising and supply chain efficiencies
Management raised full-year earnings guidance near the high end of their $7.50-$8.50 per share range. This reflected only the first-quarter beat. Decelerating sales trends could compress the multiple and limit incremental upside to today’s guidance raise, Nardone added.
JPMorgan: Target's earnings outlook reflects margin assumptions that consider the risk of weaker sales, continued increases in energy prices affecting costs and escalating promotions, Horvers said. The company's earnings in the back half of 2026 are likely to be similar to the second half of 2024, he added.
The guidance assumes slower sales trends for the current quarter, the analyst stated. Although April sales improved sequentially, this was due to an earlier Easter and tax refunds, and the outlook assumes "deceleration for the balance of the quarter given slowing tax stimulus, macro uncertainty, and comparisons to the Nintendo Switch in June," he further wrote.
BTIG: Targetreported total revenue of $25.4 billion, up 6.7% year-on-year, "driven by broad-based strength across categories and channels," Drbul said. Adjusted earnings came in at a higher-than-expected $1.71 per share, he added.
"While encouraged by early momentum, we maintain a cautious outlook given the highly competitive landscape TGT operates in, tougher compares ahead, and a still uncertain consumer backdrop," the analyst wrote. Target's stock is currently trading at a significant discount to peers, which seems "warranted" due to softness in traffic and sales trends, he further stated.
TGT Price Action: Shares of Target had declined by 0.46% to $121.80 at the time of publication on Thursday.
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