UBS has reiterated its Buy rating on Target Corp. (TGT) and maintained a $130.00 price target as investors await the retailer's fourth-quarter earnings. The firm told clients that a number of factors make the stock's near-term setup constructive ahead of the results.
According to UBS, market expectations for comparable sales in the fourth quarter appear well calibrated. Conversations with institutional investors suggest the buyside benchmark for comparable sales is roughly negative 2% to negative 3%, a level UBS views as consistent with current sentiment heading into the quarterly print.
UBS noted that Target has already reaffirmed its 2025 guidance, which the firm believes reduces the likelihood of major surprises in the upcoming report. The broker added that it expects the company to present a credible plan that will help investors believe Target is positioned to show improvement in 2026.
On guidance, UBS emphasized that management should set realistic, achievable targets for the year ahead. Specifically, the firm said the mid-point of the company's earnings per share outlook should be at least around $8.00. That level of conservatism, UBS argued, would keep expectations attainable and support investor confidence.
UBS derived its $130.00 price target by applying an approximate 15 times price-to-earnings multiple to its calendar year 2027 earnings per share estimate of $8.75. As a point of comparison, Target is currently trading at a P/E ratio of 13.74.
Separately, an equity analysis referenced in recent market commentary places a fair value for the stock at $118.19 and notes the company is "Trading at a low earnings multiple." That valuation suggests upside remains even before reaching UBS's $130.00 target.
Investors should also note the timing of the next earnings release, which is scheduled for March 10. Ahead of that date, analysts and clients will be watching for the detail and tone of any updated guidance as well as commentary on the path to margin and sales recovery.
In concurrent corporate developments, Target has announced several executive leadership changes as part of a strategic effort to accelerate growth under its new chief executive officer.
Michael J. Fiddelke has been named Chief Executive Officer and appointed to the company's board, with an annual base salary of $1.3 million. Fiddelke is also eligible for a cash incentive under the company's Short-Term Incentive Plan and for stock-based awards under the 2020 Long-Term Incentive Plan.
Effective February 15, Lisa Roath will assume the role of Executive Vice President and Chief Operating Officer, with an annual base salary of $775,000. In the company's merchandising ranks, Cara Sylvester will shift roles from Chief Guest Experience Officer to Chief Merchandising Officer.
Target also announced additions to its board of directors: John R. Hoke III and Stephen B. Bratspies have been named directors. Hoke will serve on the Governance & Sustainability and Compensation & Human Capital Management committees.
These leadership moves are presented by Target as part of a broader effort to align executive roles and the board with the company's evolving strategic priorities and to support the growth agenda under CEO Fiddelke.
Investors and market participants will be assessing both the upcoming quarterly results and the implications of the management changes. UBS' view that the near-term setup is favorable rests on calibrated market expectations, reaffirmed guidance, and the potential for management to present a credible plan for future improvement.