Bank of America Analyst Upgrades Target Stock, Predicts Potential Upside
Target’s Stock Rating Upgraded by Bank of America Analysts
On Thursday, Target Corporation’s stock saw a 1.7% rise with approximately 1.4 million shares traded, diverging from the daily average volume of 4.91 million shares according to InvestingPro data. This follows an upgrade of the company’s stock from “neutral” to “buy” by a Bank of America analyst, a move that deviates from the consensus “hold” rating among analysts.
Increased Price Target and Positive Outlook
The Bank of America analyst also raised the price target for Target (TGT) from $120 to $135 per share, suggesting a potential upside of 24%. This stands in contrast to the consensus prediction, which remains at $157 per share. The stock is currently trading at 12x 2-year forward earnings, indicating an improved risk/reward outlook according to BofA.
Anticipated Growth in In-Store and Online Activities
The analysts anticipate an increase in both in-store and online activities over the coming months. They predict a 5% rise in store footfall and an increase in digital traffic driven by factors such as Target Circle Week, the addition of Starbucks, increased drive-up sales, and an improved online shopping experience.
Potential Catalysts and Risks
Potential catalysts that could drive an increase to slightly above-consensus EPS estimates and result in P/E multiple expansion were identified. A positive shift in TGT’s ticket comps is expected due to enhanced sell-through on reduced inventory levels and fewer promotions. However, BofA also highlighted potential risks including margin pressures from labor costs and investments, aggressive competition from rivals, and the rapid growth of smaller competitors.
Wall Street Consensus and Dividend Yield
The Wall Street consensus on TGT stock is a Moderate Buy, based on 13 Buys, 16 Holds, and no Sells in the last three months. The average price target stands at $146.21 per share, suggesting a potential upside of 31.86%. InvestingPro data also indicates a 4.04% dividend yield and a 1.85% dividend growth in the last twelve months, reinforcing Target’s consistent dividend payments for 53 consecutive years.
Promising Future for Target Corporation
The company’s stock has taken a significant hit over the last six months, with a -32.32% total return, as per InvestingPro data. Yet, analysts predict profitability for the company this year, and it has indeed been profitable over the last twelve months. This, coupled with the company’s market cap of $50.96B USD, suggests a potentially promising future for Target Corporation.
