Palantir Technologies lifts guidance after Q2 results beat Wall Street estimates
On Thursday, RBC Capital Markets adjusted its price target for Target Corporation (NYSE:TGT) shares, reducing it from $112.00 to $103.00, while keeping an Outperform rating on the stock. The adjustment follows Target’s first-quarter results, which did not meet the already low expectations, prompting the company to cut its guidance for 2025. The retailer’s stock has seen a significant decline, falling approximately 31% year-to-date. According to InvestingPro data, the stock currently trades at an attractive P/E ratio of 10.78, with analysts’ price targets ranging from $80 to $155.
RBC Capital’s analysis suggests that the future performance of Target’s stock is contingent on consumer responses to widespread inflation in the second half of the year, assuming current tariff rates remain constant. In light of these considerations, the firm has adopted a cautious stance in its forecasting model, anticipating competitive and margin challenges starting in the third quarter. Despite these challenges, InvestingPro analysis shows Target maintains strong fundamentals with a healthy 28.2% gross profit margin and has consistently raised its dividend for 54 consecutive years, currently offering a substantial 4.82% yield.
The revised estimates for Target’s comparable sales are now set at a decrease of 2.8% for 2025 and an increase of 2.0% for 2026, a change from the previous forecast of a 0.2% decrease and a 1.5% increase, respectively. Adjusted earnings per share (EPS) projections have also been modified, with RBC Capital now expecting $6.68 for 2025 and $7.34 for 2026, down from the earlier estimates of $8.33 and $8.63.
The new price target of $103.00 is based on approximately 14 times RBC Capital’s revised 2026 adjusted EPS estimate of $7.34. Despite the reduced price target and earnings forecast, the firm’s Outperform rating indicates a positive outlook on Target’s stock over the long term.
In other recent news, Target Corporation has reported a challenging first quarter, with earnings per share dropping to $1.30 from $2.03 the previous year and a 3.8% decline in comparable store sales. The company has adjusted its full-year earnings per share guidance to a range of $7.00 to $9.00, reflecting significant economic uncertainties and competitive pressures. Analysts have reacted to these developments with varied outlooks. KeyBanc maintained a Sector Weight rating, while Bernstein reduced its price target to $80, maintaining an Underperform rating, citing concerns over e-commerce margins and competitive pricing. JPMorgan raised its price target to $109, maintaining a Neutral rating, and noted Target’s efforts to stabilize its inventory and margins. DA Davidson lowered its price target to $125 but kept a Buy rating, suggesting the company might have passed its most challenging period. CFRA slightly cut its price target to $99, retaining a Hold rating, and highlighted risks related to sales trends and inventory levels. These developments point to a cautious yet varied analyst outlook on Target’s performance amidst a competitive retail landscape.
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