Piper Jaffray Reiterates Overweight as Target (TGT) Experiences Slowdown in Digital Platform; Still Seeks 40% Digital Growth
Piper Jaffray reiterated an Overweight rating and $88.00 price target on Target (NYSE: TGT) following the company's 3Q earnings report. Target posted strong comps in Q3 (+1.9%) which accelerated 70bp on a 2-yr basis. Target's merchandising initiatives continue to resonate with its guests as traffic improved +1.4% in the quarter, the fourth straight quarter of positive growth. Although, TGT has experienced a growth slowdown in its digital platform. This is disappointing given that Target is looking for 40% growth in this channel in its long-term plan.
Analyst Sean Naughton commented, "We continue to favor TGT shares as merchandising initiatives continue to drive solid
traffic growth and sales. While comps beat expectations, slowing growth in the digital platform is disappointing given Target is looking for 40% growth in this channel in its long-term plan. On the margin side, it appears the majority of the pressure came from pharmacy, a business the company plans to exit pending the CVS deal closing. Additionally, out-of-stocks have shown signs of improvement which we believe makes Target a more reliable destination and can continue to drive strong traffic and sales."
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 $72.91 yesterday.