Target Corporation

Target Corporation delivered a mixed set of results for the previous quarter, with revenues well below analyst expectations but managed an earnings beat. Total sales increased by 0.5%, driven by new locations and comparable flat sales. The company exceeded profitability expectations despite inflation and rising interest rates. Target’s focus on building trust and delivering affordable products to consumers led to three consecutive years of traffic growth, with a 0.9% increase in comparable traffic in Q1. In-store sales outpaced digital sales and same-day services like Drive-Up saw significant growth. Over 97% of sales were fulfilled by Target’s stores. While inventory shrink and macroeconomic challenges remain, the company is actively working on mitigation efforts and collaborating with partners to combat organized retail crime. Despite short-term challenges, its management team remains focused on strengthening its retail fundamentals. We give Target Corporation a ‘Buy’ rating with a revised target price.