Target price target raised to $142 from $139 at Bernstein

Bernstein raised the firm’s price target (TGT) on Target to $142 from $139 and keeps a Market Perform rating on the shares. The firm believes Target has “a lot of catch-up to do.” Its overall basket price increased by 14.5% vs. Bernstein’s price gap analysis as of October 2024, likely as holiday deals have rolled off. Target has increased its promotional cadence in recent years beyond the pre-COVID level with more campaigns and the introduction of Target Circle Week. While consumers have responded well to deals, Target has seen sharper pullbacks when deals are over, as its nonpromotional pricing is not competitive vs. peers, the firm notes. To better attract traffic and generate more sustainable top-line growth, Bernstein believes Target needs to play catch-up on pricing. This, along with the company’s growing, loss-making e-commerce business, could present continued gross margin headwinds and weigh on Target’s margin recovery potential.