Target stock price target cut to $130 at Evercore ISI

On Wednesday, Evercore ISI adjusted its price target for Target Corporation (NYSE:TGT) shares, reducing it to $130 from the previous $135, while maintaining an In Line rating. The revision comes as Target’s 2025 guidance encompassed the market’s average estimate of $9.30 earnings per share, and the company saw positive traffic growth for the first time since the second quarter of 2023, referred to as the "Mojo Hiccup." Despite these developments, Target’s stock experienced a decline amid broader market concerns about trade wars and a sluggish start to the first quarter. Currently trading at $117.14, near its 52-week low of $112.53, InvestingPro analysis suggests the stock is undervalued, with a P/E ratio of just 13.6x.

Target has been emphasizing its distinct position in the retail sector, pointing to the significant growth achieved in 2020-2021, including a 20% increase in traffic since 2019. However, recent years have been less favorable, with flat sales and the company’s stock performance trailing that of its peers. With annual revenue of $106.57 billion and an EBITDA of $8.55 billion, Target maintains its position as a prominent player in retail. Management has shown a readiness to invest in customer experience, product novelty, and membership programs to counter market share gains by major competitors such as Amazon (NASDAQ:AMZN), Walmart (NYSE:WMT), and Costco (NASDAQ:COST). InvestingPro data reveals the company has maintained dividend payments for 55 consecutive years, demonstrating long-term financial stability.

Fourth-quarter trends indicated some improvement, with comparable sales up by 1.5%, only slightly behind the wider market and Walmart’s U.S. comparable sales. Looking ahead, Target did not reiterate its 6%+ operating margin goal, instead focusing on increasing profit dollars through a combination of low to mid-single-digit sales growth, modest EBIT rate expansion, and mid to high-single-digit EPS growth. Analysts anticipate that earnings projections for 2026 will likely be adjusted downward following this update.

The report acknowledges the bearish perspective, which centers on Target’s underperformance, tariff risks, and a cautious outlook for the first quarter. Conversely, bulls might find optimism in the company’s traffic increases, product initiatives, and success of its membership model. With Target’s stock currently at $117, the analyst suggests that the risk/reward ratio becomes more attractive as the valuation nears that of Best Buy (NYSE:BBY) and Kroger (NYSE:KR). The $130 base case price target is based on a 13.5 times multiple of the projected $9.60 earnings per share in 2026. For deeper insights into Target’s valuation and growth potential, InvestingPro offers comprehensive analysis through its Pro Research Report, available alongside 8 additional exclusive ProTips for subscribers.

The analyst concluded with a positive short-term trading call for Target, suggesting that the stock price could rise above $120 in the upcoming weeks as the situation around tariffs becomes clearer. For investors seeking defensive exposure in consumer staples with minimal tariff risk, the analyst recommended considering Walmart, Costco, Kroger, and O’Reilly (NASDAQ:ORLY) Automotive.

In other recent news, Target Corporation’s fourth-quarter results have drawn varied responses from financial analysts. Target’s earnings per share guidance aligned with consensus forecasts, although revenue guidance for fiscal year 2025 was lower than anticipated. Goldman Sachs adjusted its price target for Target to $142, maintaining a Buy rating, while Citi revised its target down to $120, retaining a Neutral stance. BNP Paribas (OTC:BNPQY) Exane further reduced its price target to $100, keeping an Underperform rating, citing competitive pressures and e-commerce challenges. Stifel also lowered its target to $130, maintaining a Hold rating, and highlighted concerns over consumer confidence impacting discretionary spending.

Telsey Advisory Group, however, maintained an Outperform rating with a $67 price target, focusing on Target’s strong fourth-quarter performance and growth in direct-to-consumer sales. Analysts noted Target’s minimal exposure to Chinese tariffs and its strategic expansion in the Asia-Pacific region as positive factors. Despite some challenges, Target is seen as strategically positioned to achieve its long-term financial goals, including significant revenue growth over the next five years. These recent developments reflect a mixed outlook for Target, with analysts weighing both opportunities and challenges in the current economic landscape.

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