Fed’s Powell opens door to potential rate cuts at Jackson Hole
Investing.com - Mizuho (NYSE:MFG) maintained its Neutral rating and $94.00 price target on Target (NYSE:TGT) following the retailer’s Q2 results and CEO announcement. According to InvestingPro data, Target currently trades at an attractive P/E ratio of 11.5x, suggesting potential value for investors despite recent challenges.
Target reported Q2 results that were "modestly better-than-expected, although still relatively weak," according to Mizuho. The retailer saw comparable sales decline by 1.9% with traffic down 1.3%, alongside deteriorating gross margins. With annual revenue of $105.9 billion and a market capitalization of $47.8 billion, Target remains a significant player in retail, though InvestingPro analysis indicates net income is expected to decline this year.
The company announced that current COO Michael Fiddelke will become CEO effective February 1, receiving unanimous board approval. Fiddelke brings over 20 years of experience with Target to the position. Notably, Target has maintained its position as a dividend aristocrat, having raised dividends for 54 consecutive years, with a current yield of 4.3%.
Mizuho noted that while Fiddelke’s background is impressive and his "fresh eyes" perspective could bring material change, the market reaction suggested investors preferred an external candidate. A previous Mizuho survey indicated 96% of investors favored bringing in an outside CEO to implement wholesale changes.
The research firm expressed concern about Target’s reiterated fiscal year 2025 guidance, suggesting it could be at risk as new strategic changes take shape under the incoming CEO’s leadership.
In other recent news, Target reported its second-quarter results, revealing a 1.9% decline in comparable sales. This performance exceeded RBC Capital’s estimate of a 2.6% decline and consensus expectations of a 3.1% drop. The company’s adjusted earnings per share matched expectations at $2.05. Amid these developments, Target announced that Michael J. Fiddelke will become the next CEO, effective February 1, 2026, succeeding Brian C. Cornell, who will remain as Chair of the Board. RBC Capital maintained its Outperform rating with a $104.00 price target, while DA Davidson reiterated a Buy rating and set a $125.00 price target. Truist Securities kept its Hold rating with a $107.00 price target, noting that sales were slightly better than initially expected. Morgan Stanley (NYSE:MS) also reiterated an Overweight rating with a $112.00 price target, mentioning the leadership transition’s potential impact on the company’s outlook. These recent developments reflect ongoing challenges and strategic shifts within Target.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.