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Target Down 25% in 3 Months: Time to Buy, Hold or Sell TGT Stock?
TargetTarget(US:TGT) ZACKS·2025-05-12 14:05

Core Viewpoint - Target Corporation (TGT) has experienced a significant decline in stock price, dropping 25.1% over the past three months, raising concerns about its competitive position and broader retail market challenges [1][2]. Stock Performance - TGT stock closed at $96.40, which is 42.4% lower than its 52-week high of $167.40 reached in August of the previous year [3]. - The stock has underperformed compared to the Retail–Discount Stores industry and the S&P 500 Index, which saw declines of 4.4% and 8.1%, respectively, over the same period [4]. - TGT has lagged behind peers like Dollar General and Dollar Tree, which saw stock increases of 25.8% and 18.7%, while Costco's stock declined by 6.4% [5]. Factors Affecting TGT Stock - Target's cautious outlook for the first quarter of fiscal 2025 anticipates significant year-over-year profit pressure due to consumer uncertainty, a slight decline in February net sales, and tariff concerns [9]. - Despite record Valentine's Day sales, overall performance was muted due to unseasonably cold weather affecting apparel sales and weakening consumer confidence impacting discretionary spending [10]. - Target's revenue is significantly derived from discretionary segments, which are volatile and sensitive to external shocks, compounded by ongoing U.S.-China tariff risks [11]. Financial Guidance - Target expects net sales growth of approximately 1% for fiscal 2025, with comparable sales remaining flat and projected adjusted earnings of $8.80-$9.80 per share, indicating limited upside from the previous year's $8.86 [12]. - The Zacks Consensus Estimate for earnings per share has seen downward revisions, with current estimates at $8.91 for the current year and $9.57 for the next year [13]. Valuation Insights - Target is trading at a forward 12-month price-to-earnings (P/E) multiple of 10.6X, significantly below the industry average of 32.44X and its median P/E level of 14.68 over the past year [14]. - The stock is also trading at a discount compared to peers like Dollar General (16.03), Dollar Tree (15.85), and Costco (52.46) [14][15]. Strategic Initiatives - Target operates a $31 billion private label business and aims for over $15 billion in revenue growth by fiscal 2030, including the opening of more than 20 new stores and remodels in fiscal 2025 [16]. - The company is investing in AI-powered inventory systems and enhanced delivery services, with a planned investment of $4-$5 billion in fiscal 2025 to support operational improvements and digital growth [17].