Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Bernstein maintained its Underperform rating and $86.00 price target on Target (NYSE:TGT) stock in a research note published Tuesday. The retail giant, currently trading at $104.01 with a market cap of $47.26B, shows a relatively modest P/E ratio of 11.38, according to InvestingPro data.
Analyst Zhihan Ma compared Target’s situation to Best Buy (NYSE:BBY)’s successful turnaround between 2012 and 2019 under Hubert Joly’s leadership, suggesting Target might be approaching a similar inflection point if CEO Brian Cornell steps down in September. Despite current challenges, Target maintains a strong 4.38% dividend yield and has maintained dividend payments for 55 consecutive years. For deeper insights into Target’s financial health and growth potential, InvestingPro offers comprehensive analysis in its Pro Research Report.
The research firm identified several challenges facing Target, including competition from Amazon.com (NASDAQ:AMZN) and Walmart (NYSE:WMT), noting that while there are "some low hanging opportunities," the company faces an "existential threat" from these larger rivals.
Bernstein questioned whether Target should invest heavily in building Walmart-like e-commerce supply chain capabilities, noting such investments "may not pay off if TGT doesn’t reach greater scale," while failing to do so means "e-commerce is going to continue to bleed margins."
The note compared Target’s potential turnaround to other retailers in Bernstein’s coverage including Dollar General (NYSE:DG), Dollar Tree (NASDAQ:DLTR), and Lowe’s (NYSE:LOW), suggesting that new management with "an outside perspective could be a positive catalyst," though "the jury is still out on the prospect of a turnaround at TGT."
In other recent news, Target Corporation’s second-quarter earnings report is highly anticipated, with UBS reiterating a Buy rating and setting a price target of $135. Analysts expect comparable sales to decline slightly, with some potential improvement from the Nintendo Switch launch. Fitch Ratings has affirmed Target’s Long-Term Issuer Default Rating at ’A’, noting the company’s strong market position and cash flow, though maintaining a Negative outlook due to recent execution challenges and industry volatility. Bernstein SocGen Group has raised its price target for Target to $86 from $80, maintaining an Underperform rating but expecting a slightly better top-line performance than feared. Additionally, Target is exploring a new delivery model that would ship products directly from factories to customers’ homes, similar to platforms like Temu and Shein, aiming to expand its low-cost offerings.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.