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Analyst Remains Bullish on Target’s Stock (NYSE:TGT) Despite Dramatic Dip

Asktraders News Team trader
Updated 27 Nov 2024

Target's stock (NYSE: TGT) has been under pressure over the past week of trading, falling 18.88% from the 19th through to the 26th of the month, having made new 52 week lows in the process.

It will be welcome news to holders then that the firm has received a vote of confidence from Oppenheimer as it was upgraded to a top pick, with an “outperform” status. This optimistic projection comes despite the retailer experiencing softer-than-expected results in its third-quarter financials.

Financial analyst Rupesh Parikh of Oppenheimer sees the company achieving a price target of $165, citing several positive indicators. These include what he believes is an attractive entry point following the stock's recent tumble, the company's 6% operating profit margin, a solid dividend yield of 3.52%, and achievable guidance for the fourth quarter.

Considering Target's stock price has fallen on a YTD basis, down 11.57% as an underperformer on major indices, the firm sees potential upside of more than 30% to the latest price target.

Parikh suggests the underlying cause of the recent decline related to temporary challenges; such as fewer holiday shopping days, risks of discounts, and headwinds in non-essential categories. Despite these short-term difficulties, he remains upbeat about Target's prospects.

Looking toward the future, Parikh extols Target's strategic efforts, including its digital platform enhancements, store investments, and the success from sales of its exclusive brands. Collaborations with other brands and clearance of competitors' inventories further bolster his positive outlook. Collectively, these factors lead Parikh to advise investors to see the current price dip as an opportune moment for purchasing shares.

Investors and market observers await to see if the retailer's efforts to navigate the contemporary retail landscape will align with Oppenheimer's projections. Particularly, whether the chain's embrace of digital transformation and investment in brand collaborations will generate the long-term value anticipated by Parikh.

Oppenheimer's upgrade signifies confidence in Target's capability to overcome current market adversity and continue thriving. The backing of a highly regarded financial institution may also inject increased confidence among shareholders and could potentially rejuvenate the stock's trajectory moving forward.

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