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What’s the Potential Upside in Target Stock?

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Analysts remain on the sidelines

The majority of analysts maintain a “neutral” outlook on Target (TGT) stock. Analysts expect Target to sustain the momentum in comps in the coming quarters thanks to the company’s digital initiatives. Target is expanding its delivery services to newer markets and focusing on merchandising, which is likely to drive its comps higher. Also, store remodeling and the opening of new small-format stores are expected to support the sales growth rate.

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Meanwhile, Target’s management remains upbeat and expects to generate profitable growth in 2019, which is encouraging. Analysts expect Target to sustain the growth momentum in its EPS in fiscal 2019. However, the company faces tough YoY comparisons that could result in a deceleration in its EPS growth rate.

Target’s margins are expected to remain pressured given the company’s continued investment in growth. Continued weakness in margins and heightened competition is keeping analysts on the sidelines.

Rating and target price  

Among the 25 analysts covering TGT stock, 15 analysts recommend a “hold,” nine analysts suggest a “buy,” and one analyst has a “sell” rating. Analysts have a consensus target price of $82.12 per share on TGT stock, which implies an upside of 12.3% based on its closing price of $73.10 on February 25.

Most of the analysts also recommend a “hold” on Walmart (WMT) stock. Meanwhile, they maintain a “buy” on Costco (COST).

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