Target Finds A Direction Forward: 3 Analysts Review Q1 Print, 'Margin Recovery Story'

Shares of Target Corp TGT declined early trading on Thursday, despite the company reporting better-than-expected results for its first quarter.

The report came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

KeyBanc Capital Markets On Target

Analyst Bradley Thomas maintained an Overweight rating and price target of $180.

Target’s first-quarter results reflected “encouraging execution in a difficult environment,” Thomas wrote in a note.

“While 2Q guidance reflects slowing discretionary spending trends, TGT is making progress on material cost initiatives, which supported a reiteration of 2023 guidance,” the analyst stated. “We believe near-term results continue to face risk, but believe TGT remains well-positioned for market share gains and margin improvement in the long term,” he added.

Check out other analyst stock ratings.

Telsey Advisory Group On Target

Analyst Joseph Feldman reiterated an Outperform rating and price of $185.

Target reported better-than-expected earnings for the first quarter, “although the comp slowed as 1Q23 progressed,” reflecting weaker discretionary spending in a challenging economic environment, Feldman said in a note.

“Furthermore, the 2Q23 QTD comp is tracking down LSD, with incremental pressure on profit from higher shrink and expense deleverage, more than offset by the lapping of supply chain costs and inventory markdowns from last year,” he added.

Raymond James On Target

Analyst Bobby Griffin reaffirmed a Strong Buy rating and price target of $190.

Target reported better-than-expected earnings on gross margin upside, which is an “important aspect in the margin recovery story,” Griffin said.

“While some pressure points got worse during the quarter (shrink) and the outlook for discretionary spending remains challenging in F2Q, we are encouraged by Target’s inventory position (discretionary down ~25 percent y/y) as well as the company’s positive traffic, especially considering Target’s product offering is not as heavy in grocery/consumables as other retailers,” he added.

TGT Price Action: Shares of Target had declined by 2.91% to $155.6 at the time of publication on Thursday.

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Photo: Courtesy Target