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Investing.com - Truist Securities raised its price target on Target (NYSE:TGT) to $90.00 from $83.00 on Thursday, while maintaining a Hold rating on the stock following the retailer’s third-quarter results. Target currently trades at $86.08, with a P/E ratio of just 9.99, indicating the stock is trading at a relatively low earnings multiple.
The retailer reported a 2.7% comparable sales decline in the third quarter, with decelerating traffic trends. This aligns with the company’s broader revenue decline of 2.16% over the last twelve months, despite maintaining a 6% five-year revenue CAGR. Despite the soft performance, Target’s results exceeded Truist’s near-Street-low estimates.
Target maintained that third-quarter results aligned with company expectations, but the retailer lowered its full-year 2025 earnings per share guidance to a range of $7.00-$8.00 from the previous $7.00-$9.00 range, citing the current retail environment. InvestingPro data shows analysts expect EPS of $7.52 for the fiscal year, with 9 analysts having revised their earnings estimates downward. Despite these challenges, InvestingPro analysis indicates Target appears undervalued based on its Fair Value assessment.
The company plans to increase capital expenditures by approximately 25% to $5 billion in 2026, up from $4 billion, with investments focused on store remodels, new stores, and technology improvements.
Truist Securities noted that while the increased capital expenditure represents "a step in the right direction," significant price and operational expense investments would still be needed to drive a meaningful turnaround for the retailer.
In other recent news, Target reported mixed third-quarter results, with adjusted earnings per share of $1.78, surpassing the FactSet consensus estimate of $1.71. However, the company faced a 2.7% decline in comparable sales, which fell short of analysts’ expectations. Piper Sandler noted these sales challenges and reduced its price target for Target to $85, maintaining a Neutral rating. Meanwhile, Bernstein SocGen lowered its price target to $80, expressing concerns over Target’s capital expenditure plans, including a $1 billion investment in fiscal year 2026. Evercore ISI, however, raised its price target to $100, citing new CEO Michael Fiddelke’s focus on design, shopping experience, and technology to revitalize the business. KeyBanc reiterated its Sector Weight rating, acknowledging the sales challenges and the company’s ongoing transformation efforts. Telsey Advisory Group maintained its Market Perform rating with a $110 price target, highlighting the mixed nature of the results. These developments come as Target navigates a challenging retail environment and discretionary spending issues.
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