Based in Minneapolis, Minnesota, Target Corporation (TGT) is a general merchandise retailer that offers a wide range of products including apparel, home goods, electronics, groceries, and more. Valued at a market cap of $44 billion, the company operates nearly 2,000 stores across the country and is known for its curated assortment of owned and national brands.
Shares of this discount stores operator have considerably lagged behind the broader market over the past 52 weeks. TGT has declined 39.3% over this time frame, while the broader S&P 500 Index ($SPX) has surged 9.2%. Moreover, on a YTD basis, the stock is down 28.3%, compared to SPX’s 3.7% drop.
Narrowing the focus, TGT has also underperformed the VanEck Retail ETF’s (RTH) 14.3% rise over the past 52 weeks and 2.7% uptick on a YTD basis.
On Mar. 4, TGT released its Q4 results. However, despite delivering better-than-expected performance, its shares plunged 3%. Due to one fewer week of sales as compared to 2023, and declining consumer confidence, which impacted its overall discretionary assortment, its total revenue declined 3.1% year-over-year to $30.9 billion. Nonetheless, it still marginally exceeded Wall Street estimates. Its comparable sales rose 1.5%, driven by solid digital performance and strong customer traffic, particularly in categories such as beauty, apparel, entertainment, sporting goods, and toys. On the earnings front, its adjusted EPS came in at $2.41, beating analyst forecasts by 7.1%, but declining 19.1% year-over-year.
Looking ahead to fiscal 2025, Target expects net sales growth of approximately 1%, with comparable sales projected to remain flat. The company further anticipates adjusted EPS in the range of $8.80 to $9.80.
For fiscal 2025, ending in January 2026, analysts expect TGT’s EPS to grow marginally year over year to $8.91. The company’s earnings surprise history is mixed. It exceeded the consensus estimates in two of the last four quarters, while missing on two other occasions.
Among the 34 analysts covering the stock, the consensus rating is a “Moderate Buy” which is based on 12 “Strong Buy,” two “Moderate Buy,” 19 “Hold,” and one “Strong Sell” rating.
This configuration is slightly less bullish than a month ago, with 13 analysts suggesting a “Strong Buy” rating, and three recommending “Moderate Buy.”
On May 8, Bernstein analyst Zhihan Ma maintained a “Hold” rating on TGT and set a price target of $97, which indicates a slight potential upside from the current levels.
The mean price target of $129.74 represents a 33.8% premium from TGT’s current price levels, while the Street-high price target of $188 suggests an ambitious upside potential of 94%.
