RBC Capital Upgrades Target Corporation (NYSE:TGT) to "Outperform"

Core Viewpoint - RBC Capital has adjusted its rating for Target Corporation to "Outperform" while lowering its price target from $107 to $99 amid significant challenges faced by the company, including disappointing third-quarter performance and a revised full-year earnings forecast [1][6]. Financial Performance - Target's comparable sales have contracted more than expected, leading to profitability issues and a revised full-year earnings per share (EPS) outlook of $7 to $8, influenced by a cooling job market and inflation [2][6]. - The stock has declined nearly 35% this year, contrasting with the S&P 500's 13% rise, indicating significant underperformance relative to the broader market [3][6]. Strategic Initiatives - Despite current challenges, Target is investing in technology, including AI-enabled consumer insights and the Target Trend Brain, to enhance merchandising and predict consumer trends [4][6]. - The company has experienced a 35% growth in digital sales, particularly in same-day delivery services, and has improved inventory management with a 150-basis-point improvement in on-shelf availability for top items [4]. Expansion and Investment - Target is expanding its store footprint with new larger format stores that are exceeding sales expectations, and is investing in store remodels and digital tools to enhance the guest shopping experience [5][6]. - As of now, Target's stock is priced at approximately $86.37, with a market capitalization of around $39.25 billion and a trading volume of 2,993,855 shares [5].