Target's Digital Struggles and Competitive Pressures Lead to Sell RatingWe raise F26E adj. EPS +30c to $7.25 to reflect 3Q upside & be in line w/ updated guide for $7.00-8.00 (lowered vs. prior $7.00-9.00 range). This incorporates our 4Q outlook for -2% comps (vs. unchanged -LSD% guidance for 4Q & full year) and $2.12 adj. EPS. While we see continued sales softness for TGT, we think recently announced price reductions (on 3k food, beverage, & essential items) and merchandising initiatives (incl. owned brands & partnerships) could help support its perception of value & newness over time. TGT announces strategic partnership with OpenAI TGT and OpenAI are launching ChatGPT-integrated TGT shopping next week, allowing users to build baskets, get recommendations, & checkout via pickup, drive-up, or shipping. Target will also expand its use of ChatGPT Enterprise (already deployed to 18k employees) to boost productivity, supply chain accuracy, and store operations.