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Investing.com - TD Cowen has reduced its price target on Target (NYSE:TGT) to $90.00 from $105.00 while maintaining a Hold rating on the retail giant’s stock. Target is currently trading at $86.08, near its 52-week low of $85.30, with shares down 33.5% year-to-date. According to InvestingPro analysis, the stock appears undervalued with a P/E ratio of just 9.99.
The price target cut follows Target’s reported comparable sales decline of 2.7%, which exceeded analyst expectations of a 2.1% drop, driven primarily by weakness in discretionary categories. This aligns with the company’s overall revenue decline of 2.16% over the last twelve months.
Home goods sales fell 7% year-over-year while apparel declined 4%, prompting TD Cowen to suggest Target needs to improve its product assortment and leverage technology and artificial intelligence in merchandising and design.
Target also announced plans to increase capital expenditure by $1 billion in 2026, as the retailer faces challenges with inventory management despite a 150 basis point improvement in on-shelf availability for its top 5,000 items compared to the same quarter last year.
TD Cowen identified several areas for potential improvement, including optimizing pick-and-pack operations, reducing delivery costs, increasing efficiency, and enhancing product execution, particularly in Target’s private brand strategy. Despite these challenges, Target maintains a 5.3% dividend yield and has raised its dividend for 55 consecutive years, which may appeal to income-focused investors. For comprehensive analysis of Target’s financial health and growth prospects, check out the detailed Pro Research Report available on InvestingPro.
In other recent news, Target reported a 2.7% decline in comparable sales for the third quarter, with traffic trends also decelerating. Despite these challenges, the company’s adjusted earnings per share surpassed analyst estimates, partly due to favorable tax rates and share buybacks. Analysts have had mixed reactions to these results, with Truist Securities raising its price target to $90, while maintaining a Hold rating. Conversely, Piper Sandler lowered its price target to $85, citing volatile sales trends but kept a Neutral rating. KeyBanc reiterated its Sector Weight rating, noting Target’s efforts to navigate spending challenges in the retail sector. Bernstein SocGen Group reduced their price target to $80, expressing concerns over Target’s planned $1 billion capital expenditure in fiscal year 2026. Meanwhile, Evercore ISI increased its price target to $100, highlighting new CEO Michael Fiddelke’s focus on enhancing design, shopping experience, and technology. These developments reflect the diverse perspectives analysts hold on Target’s future amid ongoing market challenges.
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