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Investing.com - Target (NYSE:TGT) stock fell approximately 6% on Thursday, significantly underperforming the S&P 500’s 0.2% decline, following the company’s announcement of COO Michael Fiddelke’s promotion to CEO.
Guggenheim maintained its Buy rating on Target with a $115 price target, describing the market reaction as an "overreaction" despite the retailer showing "modest, sequential turnaround progress" and presenting what the firm called a "sound, initial strategic plan." The company’s strong fundamentals include a 54-year track record of consecutive dividend increases, as revealed by InvestingPro analysis.
The research firm acknowledged investor preference for an external candidate who might act as a change agent but noted "there is something to be said for continuity, especially if strategic change is not an option."
Guggenheim raised its 2025 earnings per share estimate for Target to $7.05, positioning it near the low end of the company’s guidance range.
The firm highlighted that with Target shares trading below 7 times Guggenheim’s 2026 estimated EBITDA, market expectations "appear fairly low" despite potential differentiation opportunities in key discretionary merchandise categories.
In other recent news, Target Corporation reported its second-quarter earnings for fiscal 2025, posting an adjusted earnings per share (EPS) of $2.05, which slightly surpassed the forecast of $2.04. The company also reported revenue of $25.21 billion, exceeding expectations by 1.24%. Despite these positive figures, Target faced challenges with declining comparable sales and a decrease in gross margins, which have raised concerns among investors. Additionally, DA Davidson, Jefferies, and Truist Securities have all lowered their price targets for Target, with DA Davidson and Jefferies setting a new target of $115 and Truist Securities adjusting to $102, each maintaining their respective ratings.
DA Davidson noted signs of improvement in Target’s quarterly performance, while Jefferies highlighted ongoing tariff-related pressures. Truist Securities pointed to the company’s recent CEO change as a significant factor in their revised price target. Meanwhile, BofA Securities reaffirmed its Underperform rating with a price target of $93, citing long-term risks related to digital sales and advertising. BofA expressed concerns over Target’s lagging performance in digital channels compared to competitors like Walmart (NYSE:WMT).
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