Why Target Is an Analyst's 'Top Pick' After Its Stock Plunged

Link copied

Why Target Is an Analyst's 'Top Pick' After Its Stock Plunged

stock :: 2024-11-26 :: source - investopedia

By Andrew Kessel

Mario Tama / Getty Images

KEY TAKEAWAYS

Oppenheimer analysts on Monday again made Target a "top pick" despite the company's stock plunging after its earnings last week.
The research firm said Target's stock appears to be "at/near a bottom" and is positioned to grow in the long term.
Target's comparable digital sales were a bright spot in its earnings last week, growing more than 10% while same-store sales declined.

Target (TGT) shares jumped Monday after analysts at Oppenheimer named the stock a “top pick” a week after the retailer’s disappointing third-quarter earnings report sent shares swooning.

Oppenheimer said Target shares “appear to be at/near a bottom” after the stock dropped about 20% on quarterly results that missed expectations and included a reduced full-year forecast. The firm issued a “buy” rating and $165 price target for Target, about a 30% premium to Friday's close and above the Visible Alpha average of near $144.

The stock climbed more than 4% on Monday to above $130.1 Year-to-date, however, the stock is down about 8%.

Digital Efforts Should Help in the Longer Term

Oppenheimer would "take advantage of any dips amidst a still difficult discretionary backdrop,” the analysts wrote. “Longer term, 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.”

Comparable digital sales were a bright spot of Target’s earnings report, climbing 10.8% year over year, while comparable store sales dropped 1.9%.

The retailer acknowledged earlier this year that higher prices had driven some customers away and recently announced a schedule of daily and weekly sales that will run through the holiday season.