Target stock price target raised to $107 from $90 by Truist Securities

Investing.com - Truist Securities raised its price target on Target (NYSE:TGT) to $107.00 from $90.00 on Wednesday, while maintaining a Hold rating on the retail giant’s stock. The company, currently valued at $47.69 billion, trades at a relatively modest P/E ratio of 11.45x, and according to InvestingPro analysis, appears undervalued at current levels.

The firm cited better-than-expected second-quarter sales performance as a key factor in its decision to increase the price target. With annual revenue of $105.88 billion, Truist Securities suggested this sales improvement may be partially attributed to the sharp decline in Temu’s sales during the period. InvestingPro subscribers have access to over 10 additional exclusive insights about Target’s competitive positioning and growth prospects.

Despite the improved near-term results and modest stock appreciation in recent weeks, Truist Securities expressed caution about Target’s longer-term competitive positioning. The firm maintained its Hold rating, noting that "incremental upside is likely limited" due to continuing competitive pressures.

Truist Securities highlighted that Walmart will have grown by approximately $86 billion from 2021 to 2025, equivalent to "almost another Target ," which intensifies competitive pressure on the retailer. The firm also pointed out that Target has discontinued its price-matching practice against competitors like Walmart and Amazon.

The new $107 price target represents a 15x multiple on Truist’s forward twelve-month earnings per share estimate, maintaining approximately a 40% discount to the broader market. Target maintains strong fundamentals with earnings per share of $9.13 over the last twelve months and has increased its dividend for 54 consecutive years, currently offering an attractive 4.34% yield.

In other recent news, Target Corporation’s upcoming second-quarter earnings report has garnered attention, with UBS maintaining a Buy rating and setting a price target of $135.00. The investment firm predicts a decline in comparable sales between -1% and -2%, but anticipates potential improvements linked to the Nintendo Switch launch during the quarter. Bernstein SocGen Group has adjusted its price target for Target to $86.00 from $80.00, while keeping an Underperform rating, suggesting a slightly better-than-expected top-line performance with comparable sales in the -2% range. Fitch Ratings has affirmed Target’s Long-Term Issuer Default Rating at ’A’ with a Negative outlook, highlighting the company’s strong market position and cash flow but noting recent execution challenges. Additionally, Target is exploring a factory-direct shipping model to enhance its range of low-cost offerings, similar to platforms like Temu and Shein, according to Bloomberg. Bernstein also reiterated its Underperform rating, drawing parallels to Best Buy’s past turnaround, should CEO Brian Cornell step down. These developments reflect ongoing strategic adjustments and market expectations surrounding Target’s performance.

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