Summary

  • Broker BofA raised its rating on TGT from ‘neutral’ to ‘buy’ and increased the price target on the stock to US$135.
  • TGT has an overall mean recommendation of 2.4 on five and a consensus mean price target of US$149.90.
  • BofA stated that Target’s “Circle Week” should bring a sequential increase in the company’s transactions.

General merchandise retailer Target Corp. (NYSE: TGT) received a rating upgrade from broker BofA. TGT price rose by around 3% post the rating upgrade from BofA on October 12, 2023. 

The broker believes that the recent holiday season could turn the current depressed demand levels around. Expectations of recovering demand led the broker to raise its rating on TGT to ‘buy’ from ‘neutral’.

At present, TGT has an overall mean recommendation of 2.4 on five. Here, one indicates a ‘strong buy’ rating, while five represents a ‘strong sell' rating.

TGT Price Chart; Source: EODHD/Others

TGT closed at US$110.8 on Thursday, rising 1.66% over the day. The stock hit its 52-week low of US$102.93 earlier this month on October 6, 2023.

TGT’s “Circle Week” to bring in a sequential uptick in transactions : BofA

Broker BofA stated that Target’s “Circle Week” is likely to bring in a sequential increase in the company’s transactions. The “Circle Week" is Target’s holiday season discount sale that was operational from October 1, 2023, to October 7, 2023.

In addition to resuming demand, BofA is also optimistic on TGT’s profit margins, which are expected to benefit from easing transportation cost pressures and reduced inventory clearance actions.

Additionally, the increased range of brands and new products at Target is also expected to boost the outlook for the next year. Target’s store remodeling and cost savings are also likely to be beneficial, added BofA

Commenting on TGT’s share price performance, BofA stated that TGT stock price has fallen by 19-20% since the end of July. This reduction in stock price has improved the risk/reward ratio for TGT.

TGT’s consensus rating leaning toward Hold

EODHD/Others data suggests that of the 35 analysts that have covered the stock, a majority of 20 analysts recommend a ‘hold’ rating. Among the remaining fifteen, seven have given TGT a ‘strong buy’ rating and eight have given it a ‘buy’ rating.

Image Source: ©2023 Kalkine®; Data Source: EODHD/Others

Meanwhile, the consensus mean price target on TGT is US$149.90, an upside potential of around 35% over Thursday’s closing price.

The Wall Street median price target on TGT stands at US$143, lower than broker BofA’s revised price target on TGT. The broker lifted its price target on TGT to US$135 from US$120, with the new target representing an upside potential of around 22% over Thursday’s closing price.

Broker Piper Sandler also upgraded its rating on the stock to ‘overweight’, while maintaining a price target of US$180.

Alternatively, Truist Securities reduced the stock to a ‘hold’ rating in early October and lowered its price target on TGT to US$116. Evercore ISI maintained an ‘in-line’ rating on TGT and kept a price target of US$137.