Big-box retailer Target (TGT) is scheduled to announce its results for the second quarter of Fiscal 2025 on Wednesday, August 20. TGT stock has plunged 22.4% year-to-date due to concerns about the impact of macro pressures on consumer spending, tariff woes, and intense competition. Also, the backlash related to the retailer’s rollback of key diversity, equity and inclusion (DEI) initiatives hurt TGT’s business and impacted investor sentiment. Meanwhile, the consensus earnings per share (EPS) estimate of $2.04 for Q2 FY25 indicates about a 21% year-over-year decline. Wall Street expects Target’s Q2 revenue to fall by 2% to $24.93 billion, as weakness in traffic is expected to persist.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Ahead of the Q2 earnings, Wall Street is cautious on Target stock, with the average price target indicating a modest downside risk from current levels.
Analysts’ Views Ahead of Target’s Q2 Earnings
Heading into Q2 earnings, Telsey analyst Jason Strominger reiterated a Hold rating on Target stock with a price target of $100. Strominger maintained his Q2 2025 estimates of comparable sales decline of 3.5% and a 14% drop in EPS to $2.22. He also retained his Fiscal 2025 comparable sales outlook of a 2.5% decline and a 13% fall in EPS to $7.71. The analyst explained that his estimates reflect soft consumer spending, mainly on discretionary goods, higher costs, including promotions and investments in labor and technology, and potential tariff pressure.
Strominger also cited negative traffic trends in the second quarter and thinks that Target appears to be losing share to players like Amazon (AMZN), Costco (COST), and Walmart (WMT). He expects these negatives to be partially offset by TGT’s focus on value, loyalty, and strategic initiatives, including those related to private brands, new stores and remodeling, and supply chain enhancements.
On Monday, Evercore ISI analyst Greg Melich added TGT stock to the firm’s “Tactical Outperform” list ahead of Q2 earnings. Melich thinks that the Street’s estimates are “reasonable” and that the company is unlikely to reduce its guidance. The 5-star analyst sees potential for a high single-digit to low double-digit increase in earnings and near-term upside in TGT stock to $110-$115. Melich has a Hold rating on Target stock with a price target of $108.
Last week, Bank of America Securities analyst Robert Ohmes downgraded Target stock to Sell from Hold and lowered the price target to $93 from $105. The 5-star analyst noted rising longer-term sales and margin risks for the company due to slowing digital sales growth and a lack of scale in digital advertising and third-party marketplace. Ohmes also highlighted elevated tariffs, pricing and merchandising headwinds, and intense competition from Walmart and Amazon.
AI Analyst Is Bullish on Target Stock Ahead of Q2 Print
Interestingly, TipRanks’ AI stock analyst has assigned an Outperform rating to Target stock with a price target of $113, indicating about 7.7% upside potential. TipRanks’ AI analysis noted Target’s stable financial performance with attractive valuation metrics. Notably, TGT’s strategic initiatives in digital growth and operational improvements are promising. However, TipRanks’ AI Analyst also highlighted that challenges such as stagnant revenue growth and consumer confidence pressures weigh on TGT’s outlook.
Here’s What Options Traders Anticipate Ahead of Target’s Q2 Earnings
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting about a 9% move in either direction in TGT stock in reaction to Q2 results.
Is TGT Stock a Good Buy Now?
Overall, Wall Street has a Hold consensus rating on Target stock based on 10 Buys, 17 Holds, and four Sell recommendations. The average TGT stock price target of $103.28 indicates a downside risk of 1.6% from current levels.
