UBS reiterates Buy rating on Target stock, maintains $130 price target

Investing.com - UBS has reiterated its Buy rating on Target (NYSE:TGT) stock with a price target of $130.00, according to a research note released Wednesday. This target aligns closely with InvestingPro’s Fair Value assessment, which suggests Target is currently undervalued with shares trading at $91.18.

The investment firm acknowledged that Target has not performed as anticipated over recent years, noting that their investment thesis on the retailer has shifted over time. The stock has struggled with a -38.89% return over the past year and revenue declined by 1.55% in the last twelve months.

Despite these challenges, UBS analyst Michael Lasser indicated that at the current stock price, Target presents "more upside than downside" potential for investors. The retailer currently trades at a P/E ratio of just 10.65 and offers a substantial 5.04% dividend yield.

UBS expressed confidence that Target maintains "a well-defined place in the market" and suggested the retailer’s future performance remains within its own control.

The firm also noted that Target’s recent leadership transition has experienced "some bumps" but emphasized this would become irrelevant if the retailer can "right the ship, execute better and produce more consistency" in the coming months.

In other recent news, Target Corporation has introduced AI-powered features to enhance the holiday shopping experience. These include a conversational AI-powered Target Gift Finder for personalized gift recommendations and a List Scanner that allows customers to scan handwritten lists directly into their shopping carts via the Target app. In financial developments, TD Cowen lowered its price target for Target to $105, maintaining a Hold rating, while noting the company’s potential for upside with in-line results. Guggenheim reiterated a Buy rating with a $115 price target, highlighting new CEO Michael Fiddelke’s efforts in reducing corporate headcount to improve operations. Conversely, Truist Securities reduced its price target to $83, citing operational missteps in merchandising and marketing that have affected consumer perceptions. Additionally, Target has cautioned shareholders about an unsolicited mini-tender offer from TRC Capital Corporation to purchase up to 1.5 million shares at $89 per share. These developments reflect ongoing strategic adjustments and market evaluations surrounding Target.

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