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On Tuesday, Guggenheim Securities adjusted its outlook on Target Corporation (NYSE:TGT), reducing the price target from $155.00 to $115.00 while reiterating a Buy rating on the stock. In the past year, Target’s shares have underperformed, dropping 35% against the S&P 500’s 9% increase. This decline was largely attributed to a downward revision of the company’s 2026 earnings per share (EPS) expectations by 20%.
The analyst from Guggenheim pointed out that Target has faced challenging fundamentals, which have overshadowed its modest valuation. Recent trends have shown a sequential compression in comparable store sales (comp sales), dipping into negative figures. This comes ahead of potential inflationary pressures due to tariffs. Reflecting this uncertainty, Target has broadened its 2025 guidance range to $2, suggesting an EPS of $7-9 after the first quarter. Guggenheim’s estimates now align with the lower end of this range, anticipating a 2.5% decline in comp sales and a 40 basis point reduction in EBITDA margin for the remainder of the year. Despite these challenges, InvestingPro analysis shows Target maintains strong financial health metrics, with sufficient cash flows to cover interest payments and an impressive 54-year streak of consecutive dividend increases.
Despite these challenges, Guggenheim maintains a positive outlook on Target’s valuation. The estimated price-to-earnings (P/E) multiple for 2025 is considered unassuming at 13.2 times, which is notably lower than the approximately 16 times multiple from a year earlier. The firm also highlights the potential total shareholder return (TSR) of 8%, bolstered by Target’s dividend and probable buyback efforts.
In conclusion, while Guggenheim has lowered its price target for Target to $115, the firm still sees a 15-20% potential upside for the stock. The Buy rating remains in place, underpinned by Target’s valuation and shareholder return prospects.
In other recent news, Target Corporation’s financial performance and future outlook have been under significant scrutiny following its first-quarter results. RBC Capital Markets adjusted its price target for Target shares from $112 to $103, maintaining an Outperform rating. This adjustment comes after Target’s results fell short of expectations, prompting a reduction in guidance for 2025. Similarly, Bernstein lowered its price target from $82 to $80, maintaining an Underperform rating due to concerns about declining in-store shopper numbers and e-commerce margin pressures. On a more optimistic note, JPMorgan raised its price target for Target to $109 from $105, maintaining a Neutral rating while noting Target’s efforts to mitigate risks with a wider earnings per share range for the year.
DA Davidson also reduced its price target to $125 from $140 but maintained a Buy rating, suggesting that the most challenging period for Target might have passed. KeyBanc maintained a Sector Weight rating, emphasizing competitive pressures and a challenging consumer environment impacting Target’s performance. Analysts from various firms have expressed mixed views on Target’s prospects, with some highlighting potential improvements and others cautioning about ongoing challenges. These developments reflect the complex landscape Target navigates amid competitive pressures and economic uncertainties.
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