Target: Shares Too Cheap To Just Window Shop

Summary:

• I reiterate a buy rating on Target despite recent operational missteps and disappointing earnings, seeing it as undervalued with a compelling valuation gap compared to Walmart.
• Target’s Q3 earnings report was dismal, with significant misses on both top and bottom lines, leading to a 21% stock plunge and highlighting execution challenges.
• Key risks include ongoing execution issues, competition from Walmart, online retail threats, and weak Target Circle 360 numbers, but I expect better inventory management and sales rebounds in 2025.
• Technically, TGT faces resistance near $151 and support around $115, with a potential multi-year low of $103, indicating a challenging but potentially rewarding investment.

Retail has been a world of haves and have-nots in 2024. Shares of Walmart (WMT) are up 79% year to date (total return), while Target’s (NYSE:TGT) stock is down 4%. In between is the entire SPDR

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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