Analyst Mavis Hui from DBS reiterated a Buy rating on Target (TGT – Research Report) and keeping the price target at $188.00.
Mavis Hui has given her Buy rating due to a combination of factors that highlight Target’s strong performance and strategic initiatives. The company’s adjusted EPS saw a significant year-over-year increase of 43%, surpassing market expectations by 18%, which was driven by a recovery in customer traffic and improvements in gross margins. Additionally, Target’s revenue rose by 2.6% year-over-year, supported by a 2% growth in comparable sales, largely due to the resurgence of discretionary items and robust e-commerce expansion.
Target’s focus on omni-channel growth is another critical factor in Mavis Hui’s Buy rating. The company is enhancing its online and offline sales integration, with over 80% of the US population covered by its same-day delivery services. Investments in store remodeling and partnerships with renowned brands like Apple and Disney are expected to boost both online and in-store sales. Furthermore, Target’s efficient use of its physical stores as logistics centers has resulted in significantly lower delivery costs, which could mitigate potential margin pressures. Despite challenges such as inflationary pressures, Target’s strong customer loyalty and operational efficiency improvements contribute to a positive outlook for future earnings growth.
Hui covers the Consumer Cyclical sector, focusing on stocks such as Hermes International, Sands China, and Sun Art Retail Group. According to TipRanks, Hui has an average return of 4.8% and a 50.00% success rate on recommended stocks.
In another report released on February 18, Jefferies also maintained a Buy rating on the stock with a $165.00 price target.