Target (TGT) Stock Forecast & Price Target

Target's financial performance reflects a strong digital sales position, with same-day services experiencing over a 25% growth in the latest quarter, driven by the success of Target Circle 360. The company also noted a 1.5% increase in comparable sales, supported by a 2.1% rise in traffic, and an 8.7% boost in digital channel sales, which underscores the brand’s ability to attract customers in a competitive retail environment. Additionally, Target anticipates modest EBIT margin expansion in 2025, indicating potential for improved profitability moving forward.

Target's recent financial performance has raised concerns, as evidenced by a decline in card penetration by 10 basis points sequentially and an anticipated y/y decline in sales for Q1. The company's retail gross margin standing at 26.2% indicates a year-over-year decrease of 40 basis points, largely due to rising digital fulfillment and supply chain costs, along with increased promotional markdowns. Additionally, expectations for a difficult year ahead are underscored by a recent small decline in February sales and an overall sluggish trend in discretionary spending, which could further pressure Target's earnings in the coming quarters.