Jefferies cuts Target stock price target to $150, maintains buy

On Tuesday, Jefferies analyst Corey Tarlowe adjusted the price target for Target Corporation (NYSE:TGT) shares, reducing it to $150 from the previous $165. Despite the change, the firm maintained a "Buy" rating on the stock. Currently trading at $117.14, Target shows compelling value metrics with a P/E ratio of 12.4, significantly below industry averages according to InvestingPro data. Tarlowe’s adjustment comes in light of Target’s updated long-term earnings per share (EPS) growth targets, which are now set at a mid-to-high single-digit percentage (M-HSD%) compared to the previously projected high single-digit percentage (HSD%).

In a statement, Tarlowe noted that even though Target delivered a solid performance in the fourth quarter, investors are currently more focused on the company’s revised long-term targets. The company’s strong financial foundation is evident in its impressive 54-year streak of consecutive dividend increases and robust revenue of $107.57 billion in the last twelve months. The 2025 guidance provided by Target was generally in line with market expectations. Tarlowe expressed confidence that Target is capable of achieving the projected mid-to-high single-digit EPS growth, which would make the shares a value buy.

Target is recognized as a leading retailer and, according to Tarlowe, is significantly influenced by near-term macroeconomic trends, including tariffs. The company maintains strong fundamentals with a return on equity of 32% and healthy cash flows that adequately cover interest payments. Despite the slight decrease in earnings estimates and the price target, Tarlowe reiterated the "Buy" rating, signaling continued optimism about the company’s prospects. For deeper insights into Target’s financial health and growth potential, InvestingPro offers comprehensive analysis and additional ProTips.

The analyst highlighted Target’s status as a best-in-class retailer, suggesting that its current share price presents an attractive opportunity for investors. Tarlowe’s commentary indicates a belief in Target’s ability to navigate the current economic landscape and deliver on its growth targets.

The revised price target of $150 reflects the analyst’s slight adjustment to estimates but does not diminish the firm’s positive outlook on Target’s stock performance. Jefferies’ stance suggests that Target remains well-positioned in the retail sector despite the ongoing challenges in the macroeconomic environment.

In other recent news, Target Corporation has reported a strong financial performance for the fourth quarter of 2025, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $2.41, exceeding the forecast of $2.24, while revenue reached $30.9 billion, above the anticipated $30.65 billion. Despite these positive results, Target’s stock experienced a decline, reflecting investor concerns about future sales growth and economic conditions. Additionally, Target has outlined a comprehensive growth strategy aimed at boosting multi-channel sales by 2030, with plans to enhance its digital capabilities and supply chain.

Target’s strategic initiatives include reimagining key product categories starting in 2025 and expanding partnerships with brands such as Champion and Disney (NYSE:DIS). The company is also focused on enhancing its in-house media company, Roundel, with the goal of doubling its size by 2030. In terms of market analysis, Target’s digital sales and Target Plus marketplace have shown significant growth, contributing to the company’s overall performance. The company’s leadership has emphasized its commitment to innovation and meeting consumer demands through strategic partnerships and operational improvements.

Furthermore, Target plans to open around 20 new stores and remodel others in 2025, leveraging its stores-as-hubs model to optimize inventory management and delivery solutions. The retailer’s same-day services are set to become even more convenient with enhancements to the Drive Up and Returns experiences. Analysts have noted Target’s ability to deliver results above market predictions, and the company aims for $15 billion in revenue growth over the next five years, focusing on mid to high single-digit annual EPS growth.

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