Goldman Sachs cuts Target stock price target to $142, maintains Buy

On Wednesday, Goldman Sachs analyst Kate McShane adjusted the price target for Target Corporation (NYSE:TGT) shares, reducing it to $142 from the previous $166, while reaffirming a Buy rating on the stock. Following Target’s fourth-quarter results which surpassed expectations but came with lower-than-anticipated revenue guidance for FY25, the retailer’s shares declined by 3% in contrast to a 1.2% fall in the S&P 500.

Target’s earnings per share (EPS) guidance remained roughly consistent with consensus forecasts, despite a slight dip in sales during February. The company maintains a strong financial position, offering a 3.82% dividend yield and boasting a 54-year streak of dividend increases, according to InvestingPro data. McShane pointed out several positive aspects for Target’s future performance, including the potential for increased apparel sales with the arrival of warmer weather, the impact of the upcoming Circle Week event to attract more customers, and the record sales achieved during Valentine’s Day.

The analyst also suggested that Target’s FY25 revenue projection might contain a conservative estimate, acknowledging the current uncertainties surrounding consumer behavior and tariffs. Looking ahead, Target has set a goal to achieve over $15 billion in revenue growth over the next five years. The company also anticipates a low single-digit to mid-single-digit (LSD to MSD) increase in top-line growth over time, paired with a mid-single-digit to high-single-digit (MSD to HSD) rise in EPS growth over the coming years.

Goldman Sachs’ reiterated Buy rating and revised price target of $142 reflect a continued positive outlook for Target’s stock, despite the recent adjustments in financial forecasts.

In other recent news, Target Corporation reported significant growth in its fourth-quarter results for 2024, with direct-to-consumer sales increasing by 44% and a notable 28% rise in sales in the Americas. This performance was bolstered by a 116% growth in the Asia-Pacific region, highlighting the company’s successful expansion strategy. Despite these positive results, several analyst firms have adjusted their price targets for Target’s stock. Telsey Advisory Group maintained an Outperform rating with a target of $67, citing confidence in Target’s ability to meet its 2025 financial guidance. Meanwhile, Citi revised its price target to $120, maintaining a Neutral rating, while BNP Paribas (OTC:BNPQY) Exane lowered its target to $100 and kept an Underperform rating, expressing concerns over competitive pressures and margin challenges. Stifel and Jefferies also adjusted their price targets to $130 and $150, respectively, with Stifel maintaining a Hold rating and Jefferies a Buy rating. Analysts have pointed out potential challenges, such as market competition and economic volatility, which may impact Target’s future performance. Despite these challenges, some analysts remain optimistic about Target’s ability to achieve its revised long-term earnings growth targets.

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