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On Wednesday, Truist Securities adjusted its financial outlook for Target Corporation (NYSE:TGT), reducing the stock’s price target from $134.00 to $124.00 while maintaining a Hold rating. The revision follows Target’s fourth-quarter earnings and 2025 guidance, which matched expectations but highlighted a slower start to the first quarter and increased competitive challenges. Currently trading at $117.14 with a P/E ratio of 13.6, InvestingPro analysis suggests Target is trading below its Fair Value, with analyst targets ranging from $100 to $165.
The report from Truist Securities indicated that Target’s earnings for the first quarter are under pressure, suggesting that the company’s financial performance might be more heavily weighted towards the latter half of the year than previously expected. According to the analyst, this year is projected to be the third consecutive year of flat or negative comparable sales for Target, with sales figures remaining roughly the same since the end of 2021. Despite these challenges, InvestingPro data shows Target maintains strong fundamentals, including a 54-year streak of dividend increases and robust cash flows sufficient to cover interest payments.
In contrast, competitor Walmart Inc. (NYSE:WMT), which maintains a Buy rating, is expected to have significantly expanded during the same period, effectively growing by an amount equivalent to another Target corporation in terms of revenue—approximately $86 billion. This growth for Walmart underscores the competitive pressures faced by Target.
The analyst’s commentary pointed out that despite Target’s efforts to innovate and uphold strong retail fundamentals, the challenges of a soft first-quarter start and a competitive retail landscape pose additional risks to earnings. The revised price target reflects these concerns as the company navigates through the year.
In other recent news, Target Corporation has reported its fourth-quarter earnings for 2024, which included a modest earnings per share (EPS) beat. However, the company’s revenue guidance for fiscal year 2025 has been set slightly below consensus estimates, leading several analyst firms to adjust their price targets. Bernstein, Piper Sandler, JPMorgan, Evercore ISI, and Goldman Sachs have all revised their price targets downward, with figures now ranging from $124 to $142. Bernstein maintained a Market Perform rating, highlighting concerns about Target’s medium- to long-term prospects, while Piper Sandler and JPMorgan retained Neutral ratings, noting challenges in attracting new customers and strategic initiatives, respectively.
Goldman Sachs, however, kept a Buy rating, expressing optimism about potential growth in apparel sales and the impact of upcoming promotional events. Target’s financial guidance for 2025 indicates a broad range of possible outcomes, with the company focusing on increasing profit dollars through sales growth and margin expansion. Despite recent sales softness attributed to adverse weather and consumer confidence, Target has emphasized enhancing customer engagement through investments in digital capabilities and supply chain improvements. The company also aims to achieve over $15 billion in revenue growth over the next five years, with expectations of low to mid-single-digit increases in both top-line and EPS growth. These developments reflect Target’s strategic efforts to navigate market challenges while pursuing growth opportunities.
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