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Investing.com - Evercore ISI has reduced its price target on Target (NYSE:TGT) to $106.00 from $108.00 while maintaining an "In Line" rating on the stock. With a current market capitalization of $44.9 billion and a P/E ratio of 10.87, InvestingPro analysis suggests the stock is currently trading below its Fair Value.
The price target adjustment follows Target’s second-quarter results, which revealed a 1.9% comparable sales decline, a 1.3% drop in traffic, and a 19% year-over-year decrease in profit. Despite these challenges, the company maintains a strong dividend yield of 4.62% and has increased its dividend for 54 consecutive years, according to InvestingPro data. Evercore ISI noted that while Target is managing near-term profit pressure better than expected, the company is losing market share.
The research firm maintained its earnings per share estimates at $7.40 for the current year and $7.90 for next year, projecting comparable sales to decline 1.5% in the second half of 2025 with EBIT margin likely stable around 4.7%. Discover 8 more exclusive InvestingPro Tips and comprehensive financial analysis in our detailed Pro Research Report, helping investors make more informed decisions about Target’s future prospects.
Evercore ISI believes Target stock should find support above $90, with a potential comparable sales inflection to 1% growth likely in 2026 as an estimated $150 billion in stimulus boosts U.S. retail industry growth to 4%.
The revised $106 price target represents 13.5 times Evercore’s calendar 2026 EPS estimate of nearly $8.00, applying a 40% discount to the S&P to account for ongoing macroeconomic and competitive challenges as incoming CEO Michael Fiddelke works to reinvigorate the company’s performance.
In other recent news, Target reported its second-quarter results, revealing a 1.9% decline in comparable sales, which was better than the anticipated 3.0% drop. The company experienced a notable divergence between its brick-and-mortar sales, which decreased by 3.2%, and its e-commerce segment, which grew by 4.3%. Despite these mixed results, Target’s earnings met expectations, and the company maintained its previous guidance. Following these results, BMO Capital reiterated its Market Perform rating with a $95 price target, while Bernstein adjusted its price target to $87, maintaining an Underperform rating. In a significant leadership change, Target appointed COO Michael Fiddelke as its new CEO, a move that disappointed some investors hoping for an external hire. Guggenheim, however, upheld its Buy rating with a $115 price target, describing the market’s negative reaction as an overreaction. DA Davidson also adjusted its price target to $115 from $125, noting that Target’s performance showed signs of improvement, albeit still below expectations. Meanwhile, Wells Fargo (NYSE:WFC) maintained its Overweight rating, expressing confidence in the company’s future despite the CEO announcement.
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