William Blair Reiterates Outperform Rating on Target (TGT)
William Blair analyst Dylan Carden reiterated an Outperform rating on Target (NYSE: TGT).
The analyst comments "Quick take: With shares priced where they are, a print with any noise, particularly softer gross margin signals, has the potential to weigh on shares in the more immediate term. The reality is shares are trading at 28.5 times our for now unrevised 2026 EPS estimate because of what is on display in this quarter: continued execution in a challenging environment, which suggests strong visibility into both future performance and shareholder returns. Management notes that inventory availability currently is “outstanding,” which likely reflects whipsawing of tariff headlines causing brands to pull forward ordering, and general dislocation in the market. The second-quarter guide suggests the same stability and visibility continues. We do not believe shares are priced well ahead of historical ranges on expectations for earnings growth, which are still forecast to come in at a respectable midsingle-digit level off three years of much higher growth. We believe that valuation more reflects a scarcity premium for a model that can deliver stable comp and powerful free cash flow dynamics to reinforce competitive positioning and return to holders. We believe the largest risk would be any greater air pocket of inventory starting in the second half of the year, as vendors canceled or delayed orders to avoid tariffs. For now, given more recent pauses on tariffs, this seems a lower risk."
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 $98.12 yesterday.