Target stock price target lowered to $115 at DA Davidson on CEO change

Investing.com - DA Davidson lowered its price target on Target (NYSE:TGT) to $115.00 from $125.00 on Wednesday, while maintaining a Buy rating on the stock following the retailer’s second-quarter fiscal 2025 results. The new target sits within the broader analyst range of $82-$135, with InvestingPro data showing the stock is currently trading at an attractive P/E ratio of 10.9x.

The firm noted that Target’s quarterly performance showed "signs of improvement" and was "less worse than expected" relative to market expectations, despite not characterizing the results as good overall. This assessment aligns with InvestingPro’s analysis, which indicates Target maintains a GOOD Financial Health Score, with 10 analysts recently revising their earnings expectations upward.

DA Davidson indicated that the announced CEO change has negatively impacted the stock price, offsetting the marginally better quarterly performance. The analyst report highlighted "two reasons why that announcement is hurting the stock as well as reasons why the change could be a positive."

The price target reduction reflects a "discounted 14.5x multiple" applied to DA Davidson’s 2026 forecast for Target, which the firm described as "a significant discount to peers."

Despite lowering the price target, DA Davidson maintained its Buy rating on Target shares, citing "very low expectations" for the company and "some encouraging signs" from both the earnings report and the subsequent conference call.

In other recent news, Target Corporation reported its earnings for the second quarter of 2025, with an adjusted earnings per share (EPS) of $2.05, slightly surpassing the forecast of $2.04. The company’s revenue for the quarter reached $25.21 billion, exceeding expectations by 1.24%. Despite these positive figures, concerns arose due to a decline in comparable sales and a dip in gross margins. In light of these results, Jefferies lowered its price target for Target to $115 from $120, maintaining a Buy rating, citing soft comparable sales and ongoing tariff-related pressures. Truist Securities also adjusted its price target to $102 from $107, keeping a Hold rating, with a focus on the company’s recent CEO change. Meanwhile, BofA Securities reaffirmed its Underperform rating with a $93 price target, pointing to Target’s slowing digital sales growth and lack of scale in digital advertising and third-party marketplace. These developments reflect ongoing challenges and strategic shifts at Target.

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