Why This Target Analyst Says Retail Stocks May See an “Upside Bias” in Coming Months


Target company TGT shares gained ground on Friday after the discount retailer scored an upgrade on Wall Street.

The target analyst: Gordon Haskett analyst Chuck Grom moved Target from Hold to Buy and raised the price target from $255 to $300.

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Target takeaways: In the upgrade note, Grom said he had been bullish on Target for years and only downgraded the stock to Hold in December when the company faced short-term growth uncertainty. term during the holiday season. He had also become uncomfortable with the sustainability of Target’s drive-up business.

Gordon Haskett’s recent data work, in-store audits, customer survey and conversation with Target management suggest Target appears to be on the right track, the analyst said.

“Furthermore, and as we reflect on the broader retail landscape…there remain a number of cross-currents – both macro and micro that will influence competitive trends over the coming quarters, but sentiment seems to have tipped too far in the negative direction (XRT down 18.0% YTD vs XLP up 2.0% + plethora of sell-side downgrades in recent weeks) in our view, and we suspect the group could see more of an upward bias in the coming months – a time when XRT tends to perform better (historically outperforming April through July),” he said.

Grom said he expects retail winners to start outpacing losers. In addition to Target, he’s bullish on Costco Wholesale Corporation COST, BJs Wholesale Club Holdings Inc bj, Dollar General Corp. CEO, Home Depot Inc. HD, Lowe’s Companies Inc. LOW and Tractor Supply Company TSCO.

TGT Price Action: Target shares were trading up 2.95% at $234.92 as of midday Friday, according to Benzinga Pro.

Benzinga’s opinion: Target and other discount retailers could also benefit from inflation, as rising grocery prices drive shoppers away from high-end grocery stores.

Photo courtesy of Target.


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