Stifel analyst Mark Astrachan weighed in on Target (NYSE: TGT) following Q2 results, saying while disappointing the reiterated 2nd-half guidance matter mores.

The analyst commented, "Target reported disappointing F2Q22 results and reiterated prior F2H22 guidance. Comparable sales increased 2.6% (consensus 2.8%), consisting of 1.3% for store sales and 9.0% for digital sales. Traffic increased 2.7% and ticket was 0.0%, with each decelerating sequentially on a 2-year basis. Gross margin of 21.5% compares to consensus of 23.9%, while operating income of $321mm compares to consensus of $521mm. Inventories increased 36% y/y and 2% sequentially. Overall we view the F2Q result as disappointing but also as transitory in time, with lower-than-anticipated gross margin reflecting measures to improve inventory (markdowns, impairments, etc) given weaker-than-originally-expected sales trends in discretionary categories. Maintained F2H guidance (low-to-mid single-digit sales growth and an operating margin around 6.0%) indicates the company expects a meaningful improvement in trends, and which we view as most notable and important for investors suggesting greater management visibility. We anticipate TGT shares are unlikely to move materially on the result."

The analyst reiterated a Hold rating and $185.00 price target on TGT.

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Shares of Target closed at $180.19 yesterday.