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Investing.com - Bernstein SocGen Group has raised its price target on Target (NYSE:TGT) to $86.00 from $80.00 while maintaining an Underperform rating on the stock. The retail giant, currently trading at $100.94 with a market cap of $45.79B, appears undervalued according to InvestingPro’s Fair Value analysis.
The firm expects Target’s top-line performance to be slightly better than feared, with comparable sales potentially in the -2% range compared to consensus estimates of -3.2%.
Bernstein SocGen notes that potential upside could come from the Nintendo Switch 2 launch, though this might come at the expense of margins for the retailer.
The firm sees additional downside risk on the gross margin front as Target faces tough comparisons from a shrink recovery perspective.
Bernstein SocGen also observed that Target shares have experienced some short covering ahead of a potential management change, which could serve as a catalyst for the stock, particularly if an outsider were appointed to the leadership position. For deeper insights into Target’s valuation and 10+ additional ProTips, visit InvestingPro.
In other recent news, Target Corporation announced a 1.8% increase in its quarterly dividend to $1.14 per share, payable on September 1, 2025. Fitch Ratings revised Target’s outlook from Stable to Negative, maintaining its Long-Term Issuer Default Rating at ’A’. This adjustment was influenced by operational challenges leading to decreased market share and profitability, with an anticipated EBITDA drop of over 10% in 2025. In a strategic move, Target is testing a new delivery model to ship products directly from factories to consumers, aiming to expand low-cost offerings. This initiative aligns with trends seen in Chinese e-commerce platforms like Temu and Shein. Meanwhile, Bernstein analysts reiterated an Outperform rating for Walmart (NYSE:WMT), highlighting its e-commerce profitability. TD Cowen emphasized BJ’s Wholesale Club (NYSE:BJ) as a top retail idea, noting its success in membership penetration and digital sales growth. These developments reflect ongoing shifts and strategies within the retail sector.
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