TGT

Shares of Target (TGT), the seven-largest big-box retailer in the U.S., which is well known for its trendy yet affordable range of everyday items, have surfaced back from below the $100 water line after rising by 3.5% on June 10. This happens despite recent price hikes leaks from the U.S. consumer segment, which could form potential headwinds for further bounce of the stock. Walmart and Target employees were reportedly sharing photos of some toys' sticker prices up to 40% higher than previously, according to observations of social media sources since early June.

Keeping prices as low as they can for as long as they can was the pillar for holding consumer visits high but restrained retail margins on limited levels. While Walmart was doing much better thanks to e-commerce, Target was focusing on fast deliveries with offline sales still prevailing, which did not allow the chain's profits to grow at a sufficient pace. Again, Target traditionally has greater exposure to discretionary goods than groceries or other essentials compared to its rivals. All this led Target shareholders to face a decline of stock prices by approximately 30% since the beginning of 2025, on even higher concerns to follow its Q1 earnings report on May 21, when Target missed consensus estimates with EPS (equity per share) of $1.30 vs $1.65 expected on revenue of $23.85 billion vs $24.35 billion expected. Net sales were down 2.8%, comparable sales dropped by 3.8% YoY, and the stocks continued to dive. But on the positive side was a delayed "prize" that Target CEOs maintained their full-year guidance of $7-$9 for EPS despite all the listed challenges.

Investing crowds now may get the sense that very selective price hikes in hypermarkets can bring more profit margins in some key problem areas of trans border supply without alienating the bulk of loyal visitors at the same time. The U.S.-Sino trade talks began being extended into the rest of the week. Wall Street hopes the trade progress will help retailers in avoiding larger import cost increases. Overall, the tariff shock to U.S. stocks is now lessening if not fading, which is providing support for consumer staples firms, including Target. The current moment could be very good for a rebound with an improving bullish momentum if Target shares break the immediate resistance barrier near $105.

Target management is doing a number of things to boost confidence, including launching 10,000 new summer items, expanding brand collaborations as well as improving its image in eyes of ordinary and rather conservative families by pulling back all long-held DEI (Diversity, Equity, Inclusion) agenda initiatives like retracting its support for NYC Pride this year, even though Target still trotted out its annual Pride merch collection for not to miss queer customers. Target swapped out rainbow flags to stars and stripes during the Pride month. Whether all those measures will ultimately have a good or bad effect on sales, we will soon find out, but it seems that investors anticipate improvements in financial indicators before the end of the summer season, which is translated in sentiment already. A 54-year dividend increase streak also looks impressive. Target announced its major strategic initiative of a multi-year Enterprise Acceleration Office to improve its operational effectiveness, simplify internal processes and better leverage technology and data. This roadmap for growth could help improve earnings and restore the stock’s value as a consequence in the longer-run.

If only the stock would break through $105, it could accelerate further climbing ahead of the company's next earnings call on August 13. Some investment houses are improving their projections on Target, but there are hidden caveats within them. As a good example, analyst John Heinbockel at Guggenheim cut his price target for Target stock to $115 from $155, while still maintaining a Buy rating, saying, “challenging fundamentals have prevailed over a modest valuation during the past year”. As everyone surely understands, $115 is much lower than $155, so it seems like the mid-term goals have been lowered, but maintaining the fund's recommendation to Buy even up to achieving $115 per share still means Buy, because even $115 per share is almost 10% higher than current prices for Target. Some analysts also cite potential buyback efforts. Wall Street's pool of experts has a Moderate Buy consensus rating on Target stock, which is now based on 10 Buys, 20 Holds, and only 1 Sell recommendation.