On Thursday, CFRA analyst Arun Sundaram adjusted the price target for Target Corporation (NYSE:TGT) shares, increasing it to $162 from the previous target of $160. The firm maintained a Buy rating on the stock.
The revision came after Target announced preliminary results for the fourth quarter of fiscal year 2025, which included the holiday season, demonstrating stronger than anticipated growth and a bounce back from less impressive third-quarter figures. With a current market capitalization of $59.67 billion and a P/E ratio of 13.7, Target shows strong financial fundamentals, earning a "GOOD" overall health score according to InvestingPro analysis.
Target reported a 2.8% increase in total sales for November and December, with comparable sales climbing 2.0%. This rise was attributed to a 3% uptick in customer traffic and a 9% year-over-year increase in digital sales. The company experienced notable gains in discretionary categories, particularly in apparel and toys.
Both Black Friday and Cyber Monday generated record-breaking sales for Target. The company’s strong performance is backed by its impressive dividend history, having maintained payments for 55 consecutive years with a current yield of 3.33%.
Following the positive holiday performance, Target has revised its comparable sales forecast for the fourth quarter, now expecting a 1.5% increase, an improvement from the previously anticipated flat growth. However, the company has chosen to maintain its adjusted earnings per share (EPS) guidance range of $8.30 to $8.90, reflecting a cautious stance as the quarter has not yet concluded.
Sundaram highlighted that Target’s strong holiday season positions the company favorably for the upcoming fiscal year, especially concerning inventory levels, which had been higher than usual at the end of the third quarter. With the updated sales figures and outlook, CFRA has raised its 12-month target price for Target to $162, which is 16 times their projected earnings per share of $10.11 for fiscal year 2026, up from the previous estimate of $10.02. This earnings projection is an increase from the estimated EPS of $8.81 for fiscal year 2025, which itself is an adjustment from the prior estimate of $8.76.
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