Bernstein SocGen Group Reiterates Underperform Rating on Target (TGT), PT $82

Bernstein SocGen Group analyst Zhihan Ma reiterated an Underperform rating and $82.00 price target on Target (NYSE: TGT)

The analyst comments "While the Q1 miss and lowering of guidance have been largely priced in, we see further downside long-term as Target faces a tough trade-off between sales and margins. TGT has lost share in key discretionary categories and if such trends continue, the company will not be able to participate much in the upside when discretionary demand rebounds. To re-accelerate sales growth, TGT needs to continue to invest in pricing and drive e-commerce growth, both of which are margin dilutive. In particular, a full revamp of TGT’s e-commerce supply chain to introduce automation and structurally improve margins could take 5+ years and weigh on margins, which investors may not be patient enough for. While a management change in the fall could introduce upside, we are not positive that new management will be able to turn around the business given its structural challenges."

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.

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