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Investing.com - Goldman Sachs has reiterated its Neutral rating for Target (NYSE:TGT) with a price target of $90.00, according to a note released by analyst Kate McShane. The retail giant, currently valued at $47.77 billion, trades at an attractive P/E ratio of 11.5x and offers a substantial 4.33% dividend yield. According to InvestingPro analysis, Target appears undervalued based on its Fair Value calculations.
The retail giant’s stock dropped approximately 10% in pre-market trading, which Goldman Sachs attributes to negative comparable sales and a gross margin miss in its recent quarterly results. Despite the challenges, InvestingPro data shows Target maintains a GOOD overall Financial Health Score, with particularly strong profitability metrics.
Target maintained its fiscal year 2025 sales guidance, projecting a low-single-digit decline, compared to Goldman Sachs and consensus estimates of -1.2% and -1.7%, respectively.
The company also reaffirmed its adjusted earnings per share guidance range of $7.00-9.00 for fiscal year 2025, while Goldman Sachs forecasts $7.63 and consensus estimates sit at $7.35.
Goldman Sachs noted that Target did not provide specific guidance for fiscal year 2025 same-store sales or operating margin rate, and expressed interest in several factors including sales trends throughout the second quarter, category performance, gross margin drivers, inflation outlook, inventory position, and promotional strategy.
In other recent news, Target reported its second-quarter results, which showed a 1.9% decline in comparable sales. Despite this decline, the results were slightly better than some analysts’ expectations, with adjusted earnings per share aligning at $2.05. RBC Capital maintained an Outperform rating with a $104.00 price target, acknowledging that the sales performance was better than their estimate of -2.6%. Meanwhile, Mizuho (NYSE:MFG) kept a Neutral rating and a $94.00 price target, noting the results were modestly better-than-expected but still weak overall. DA Davidson reiterated a Buy rating with a $125.00 price target, citing that the results were slightly better in sales and margins compared to previous quarters. Truist Securities maintained a Hold rating and a $107.00 price target, observing that sales were slightly better than initially expected. Morgan Stanley (NYSE:MS) continued with an Overweight rating and a $112.00 price target amid Target’s CEO transition, expressing some uncertainty about the company’s future under new leadership. These developments reflect varied analyst perspectives following Target’s latest earnings report.
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