Target Stock Pops On Upgrade, But These Investors Believe Analyst Has Missed The Mark: Here's Why

Target Corporation TGT was featured as the call of the day Monday on CNBC's "Fast Money Halftime Report."

What Happened: Wells Fargo analyst Edward Kelly upgraded Target from an Equal-Weight rating to Overweight and announced a $195 price target.

Kelly believes the actions of management in response to inventory issues should help steady the stock. The Wells Fargo analyst sees limited downside risk with the stock down nearly 30% year-to-date. 

Related Link: Target Earns An Upgrade And 26% Price Target Bump By This Analyst

Why It Matters: The "Fast Money Halftime Report" panel unanimously disagreed with the analyst call. Virtus Investment Partners' Joe Terranova even cut the stock from his ETF this week, citing growth concerns.

"This was difficult because we've owned it since inception, but the growth is just decelerating too quickly," Terranova said. 

Target has been able to grow at an average of 16% over the last two years, but in its most recent quarter, the retailer reported growth of just 4%, he noted. 

"So we had to remove it from our portfolio," Terranova concluded.

Boston Private's Shannon Saccocia told CNBC that she believes Terranova is making the correct move. 

"I think there's a couple of quarters, additionally, of headwinds here," she said. 

With goods spending falling "precipitously" over the last couple of months, Saccocia expects the higher margin parts of Target's business to remain under pressure.

Sand Hill Global Advisors' Brenda Vingiello also sided with Terranova over the Wells Fargo analyst. 

Although she acknowledged that the valuation has become more compelling with the stock down so much since the start of the year, she sees headwinds in the short term as well.

"I agree that, over the next couple of quarters, comparisons are tough and there's gonna be some headwinds, especially on the consumer side with goods-related spending," Vingiello said.

TGT Price Action: Target has a 52-week high of $268.98 and a 52-week low of $137.16.

The stock was up 1.31% at $165.60 at press time, according to data from Benzinga Pro.

Photo: Courtesy of Target