BofA Securities Sees 5 Reasons to Buy Target (TGT)

BofA Securities analyst Robert Ohmes reiterated a Buy rating and $150.00 price target on Target (NYSE: TGT) noting that the company "very good about the start of business in February" and offering 5 reasons to buy the stock today:

1. Same-store sales are reaccelerating

2. When guests use Drive Up for the first time TGT sees a 25% increase in their spend across both
digital & in-store) as consumers consolidate shopping trips in favor of value & convenience

3. Covid-19 could be causing a stock up buying binge. The company has “seen a surge in store traffic” as US consumers appear to be starting stock-up trips.

4. Higher ROIC. Management expects to maintain +LSD% comps, +MSD% EBIT growth, & +HSD% EPS growth which when combined with share repurchases and declining CapEx, implies higher free cash flow and ROIC.

5. Attractive Valuation. "Rolling forward our valuation basis, our unchanged $150 PO reflects ~20-21x our $7.35 F22E EPS (was 22x our previous F21E EPS) given recent compression in market valuations".

For an analyst ratings summary and ratings history on Target click here. For more ratings news on Target click here.

Shares of Target closed at $107.95 yesterday.

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