Deutsche Bank analysts placed Target (NYSE:TGT) on the Fresh Money List, highlighting it as a key stock pick anticipated to show strong performance in the next 12 months. They point out Target’s cautious 2024 outlook, which may lead to positive adjustments in earnings forecasts, ongoing improvements in customer traffic, and an increased focus on value in its product assortment as indicators of a likely uptick in sales beginning the second quarter.
The analysis suggests several drivers that could sustain growth in same-store sales and enhance profit margins, with expectations for earnings per share (EPS) to surpass $10 in 2024.
Given its current lower valuation compared to peers in the retail sector, Deutsche Bank sees Target’s stock aligning with or surpassing broader market valuations through effective strategy implementation.
The analysts believe the management team’s current direction is well-suited for future growth, envisioning a scenario with low to mid-single digit comparable sales growth, over 6% EBIT margins, and earnings of more than $10 per share in the foreseeable future.