Target's Remarkable Growth Since 2019 Outshines Walmart's - Analyst Explores Future Outlook

Piper Sandler analyst Edward Yruma reiterated the Overweight rating on Target Corporation TGT with a price target of $180.

TGT has added $30 billion in revenue from 2019 to 2023E (38% growth vs 23% at Walmart Inc. WMT) and has been focused on improving operational efficiency and discipline in 2023 - the analyst expects continued gains next year.

TGT is well positioned to lean into improving medium-term discretionary trends - the analyst says, "the stock remains one of our favorite ideas for 2024."

TGT is working to standardize work processes and reduce unnecessary complexity, which is helping drive higher NPS scores as well as better financial performance, per the analyst.

TGT is seeing greater cooperation with law enforcement and has brought in third party security specialists. Passive antitheft devices have been installed when necessary, the analyst notes.

TGT continues to add new brands within home and baby, and this trend will accelerate as share continues to consolidate, the analyst notes. 

TGT's focus on innovation is helping drive a differentiated private-label assortment. 

Target Circle personalization (specifically promotions) remains in early days, but the analyst projects significant long-term opportunities. 

Finally, TGT continues to see strong returns from remodels and new stores, which could help drive long-term growth. 

Price Action: TGT shares are trading higher by 0.11% to $139.53 on the last check Friday.

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