On Wednesday, Roth/MKM adjusted their financial outlook on Target Corporation (NYSE:TGT), increasing the retailer's price target to $153.00, up from the previous $153.00, while maintaining a Neutral stance on the stock.
The firm's analysis pointed to a blend of challenges and improvements, noting that despite a rise in profitability, the last quarter marked the poorest year-over-year holiday performance since 2008.
The report highlighted that comparable store sales in physical locations declined by 5.4% year-over-year, a steeper drop than the 4.6% decrease observed in the third quarter, and worse than the 4.3% dip in the second quarter.
Digital sales also experienced a downturn. However, the firm recognized that Target benefitted from lower markdowns, freight costs, and shrinkage, which they attributed in part to likely reduced hours for self-checkout, contributing positively to the company's profitability.
Roth/MKM's commentary indicated concerns about Target's market position, suggesting that the company's current trajectory hints at a fading rather than improving stance. Despite acknowledging that Target's profit goals may be within reach, the firm expressed caution by stating that a return to growth for the retailer is not guaranteed.
The analysis concluded with a reiteration of their Neutral rating, while providing the updated price target of $153 to reflect the adjustments in their financial forecast for Target Corporation.
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