Sarina Trangle
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Target is slated to release its first-quarter earnings next week, and they may be weaker than expected, Oppenheimer analysts wrote in a research note Wednesday.
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The firm's analysts cut their price target for Target shares for the fifth time since last March.
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But Oppenheimer remains bullish on Target's long-term prospects and believes the current dip in stock prices may be a good opportunity to buy.
All eyes are on Walmart’s (WMT) earnings this week, but Target’s (TGT) numbers—scheduled for next Wednesday morning—will also be watched closely by retail analysts, with some saying its stock may be in for a tough spell.
Oppenheimer trimmed its target price, but kept its “outperform” rating of Target’s shares. The retailer’s near-term outlook appears challenging, Oppenheimer said in a research note Wednesday, but this gives investors the opportunity to buy shares at a “discounted valuation” before they regain momentum, the note said.
Oppenheimer expects Target to report a 4% year-over-year drop in comparable sales in the first quarter, and $1.14 earnings per share (EPS)—a fraction of the $1.68 average consensus estimate among analysts who follow the company and were polled by Visible Alpha.
Profit may be under pressure as consumers pulled back on discretionary items—such as beauty products—and some boycotted the chain for abandoning some of its diversity, equity, and inclusion initiatives, Oppenheimer said. Its research team said Target may update and lower its full-year outlook, forecasting $7 EPS for 2025, rather than the prior $8.80 to $9.80 range.
Oppenheimer lowered its target price for the fifth time since March 2024, issuing a $130 target for the retailer. That’s about 5.5% above the consensus price target from Visible Alpha, and 36% above the $95.11 that shares were trading for Wednesday afternoon. They were off almost 3% recently, and have declined almost 30% this year.
Still, Oppenheimer remains optimistic about Target’s longer-term prospects.
“We believe the company is well positioned to capture share driven by digital efforts, store investments, merchandising success on the exclusive brand front, competitor liquidations over time, and partnerships with other brands/retailers,” the firm's note said.
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