Wolfe Expects More Spending at Target (TGT) as Activist Pressure Builds

Core Insights - Target Corporation (NYSE:TGT) is recognized as one of the 14 Best Dividend Growth Stocks to buy and hold in 2026 [1] - Wolfe Research analyst Spencer Hanus maintains an Underperform rating on Target with a price target of $81, citing activist investor Toms Capital's stake as a potential positive influence on the company's narrative [2] - Target's third-quarter results showed a 1.5% decline in net sales year-over-year, while digital sales increased by 2.4%, maintaining its status as a Dividend King with 54 consecutive years of dividend increases [3] Financial Performance - Target's net sales decreased by 1.5% compared to the previous year, indicating mixed performance [3] - Digital sales, however, saw a growth of 2.4%, reflecting a shift in consumer purchasing behavior [3] Strategic Initiatives - The company is intensifying its focus on same-day delivery, with volumes increasing by 35% in the latest quarter, indicating a response to competitive pressures [4] - Target plans to invest $5 billion in capital spending to support growth initiatives through 2026 [4] Market Outlook - The involvement of activist investors may lead to operational changes that could improve the outlook for shareholders over time, contingent on favorable economic conditions [4] - Consumer discretionary spending remains a risk factor that could impact future performance [4]