On Tuesday, Stifel analysts revised their outlook on Target Corporation (NYSE:TGT), resulting in a lowered price target. The new target is set at $130.00, down from the previous figure of $145.00, while the firm continues to recommend a Hold rating on the retail giant’s shares. According to InvestingPro analysis, Target is currently trading near its 52-week low at $117.14, with metrics suggesting the stock is undervalued relative to its Fair Value. The company maintains a healthy dividend yield of 3.82% and has raised its dividend for 54 consecutive years.
The decision to adjust the price target comes after a careful analysis of Target’s fourth quarter of fiscal year 2024 performance, which aligned with expectations, and a forecast for fiscal year 2025 that fell short of consensus predictions. Stifel’s analysts have recalculated their fiscal years 2025-2026 estimates to reflect these recent developments. They also cited a weakening in consumer confidence as a primary reason for the adjustment, noting its impact on discretionary spending and, consequently, on the company’s near-term prospects. With a market capitalization of $53.72 billion and trailing twelve-month revenue of $107.57 billion, Target remains a significant player in retail.
Target has signaled expectations for weaker results in the first quarter of fiscal year 2025, including earnings per share (EPS) and comparable store sales (comp), due to initial costs and uncertainties surrounding tariffs. However, the retailer anticipates an uptick in performance as the year progresses, with particularly favorable comparisons expected in the third quarter. The analysts believe that comp growth could see improvement through fiscal year 2025, although this is somewhat dependent on macroeconomic volatility and consumer confidence levels. InvestingPro data reveals Target trades at an attractive P/E ratio of 12.42, suggesting potential value opportunity. Subscribers can access 8 additional ProTips and comprehensive financial analysis in the Pro Research Report.
The report also highlighted that despite a slight sales decline in February, discretionary spending is showing signs of gradual improvement when compared to previous years. Stifel’s analysis suggests that Target is effectively navigating through a challenging consumer environment. The firm’s revised price target of $130 reflects an 8x multiple of Target’s projected fiscal year 2026 EBITDA, suggesting that the stock is currently trading slightly below what Stifel considers fair value. This aligns with Target’s strong financial health metrics, including sufficient cash flows to cover interest payments and consistent profitability over the last twelve months.
In other recent news, Target Corporation reported its fourth-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $2.41 against the forecasted $2.24. The company’s revenue also exceeded projections, reaching $30.9 billion compared to the anticipated $30.65 billion. Despite this strong financial performance, there are investor concerns due to flat comparable sales forecasts for 2025. In strategic moves, Target announced plans to boost its multi-channel sales by 2030 through investments in digital capabilities, supply chain improvements, and new partnerships with brands like Champion and Disney (NYSE:DIS). Additionally, Jefferies analyst Corey Tarlowe adjusted Target’s stock price target to $150 from $165, while maintaining a "Buy" rating, reflecting confidence in the company’s ability to achieve mid-to-high single-digit EPS growth. Target’s strategy involves reimagining product categories and enhancing its in-house media company, Roundel, by 2030. These developments come as Target navigates a challenging macroeconomic environment, focusing on delivering value and meeting consumer demands.
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