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On Wednesday, TD Cowen analysts initiated coverage on Target stock (NYSE:TGT), assigning it a Hold rating. The analysts set a price target of $105.00 for the retail giant. Currently trading at $95.78, Target’s stock appears undervalued according to InvestingPro’s Fair Value analysis.
The analysts highlighted Target’s attractive core business, which is supported by innovative and exclusive products, as well as profitable digital fulfillment strategies with potential for scale. They noted that Target’s five-year revenue compound annual growth rate (CAGR) stands at 6.4%, compared to Walmart (NYSE:WMT)’s 5.4%. The company maintains a healthy 4.68% dividend yield and has maintained dividend payments for 55 consecutive years, demonstrating strong financial discipline.
Despite the positive long-term outlook, the analysts pointed out that Target is facing near-term challenges. These include competitive pressure on comparable sales and related cost inefficiencies that are expected to continue throughout the year. InvestingPro data reveals that 28 analysts have recently revised their earnings expectations downward, though the stock trades at an attractive P/E ratio of 10.5x. For deeper insights into Target’s valuation and future prospects, check out the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
The analysts also cited tariffs and lower consumer sentiment as contributing factors to Target’s current challenges. They emphasized that these issues could impact the company’s performance in the short term.
Target’s management has indicated that over the long run, both frequency and discretionary categories are expected to grow by 3-4%. However, the analysts remain cautious about the immediate future, advising a Hold position for now.
In other recent news, Target Corporation has faced several analyst adjustments and financial evaluations. Guggenheim Securities reduced its price target for Target from $155.00 to $115.00, maintaining a Buy rating. The firm noted a 2.5% expected decline in comparable sales and a 40 basis point reduction in EBITDA margin for the year. RBC Capital Markets also lowered its price target from $112.00 to $103.00, keeping an Outperform rating, with adjusted earnings per share projections now at $6.68 for 2025 and $7.34 for 2026. KeyBanc maintained a Sector Weight rating, highlighting competitive pressures and a challenging consumer environment impacting Target’s performance.
Bernstein analysts adjusted their price target to $80 from $82, maintaining an Underperform rating. They expressed concerns over e-commerce margins and potential impacts from tariffs on gross margins. JPMorgan raised its price target slightly to $109.00 from $105.00, holding a Neutral rating, and noted a 3.8% decrease in first-quarter comparable sales. Despite these challenges, Target’s broader earnings per share range of $7.00 to $9.00 for the year aims to mitigate risks amidst economic uncertainty. Analysts have varied outlooks, reflecting both the challenges and potential upsides for Target in the current market environment.
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