Target (TGT) posted a strong fiscal Q1 beat and comp sales as organizational changes led to improved traffic and in-stock levels, and tax refunds likely supported customer spending, RBC Capital Markets said in a note Wednesday.
Management reported strength across merchandising categories, consumer demographics, and income brackets as well as both in-store comp and digital channels, the brokerage said.
However, the company shared limited commentary on Q2 traffic and demand trends, and highlighted tougher comparisons, leading investors to question the sustainability of momentum, particularly as the tax refund season concludes and inflation rises, according to the note.
The brokerage raised its adjusted earnings per share and comp sales estimates for fiscal Q2 and 2026, saying evidence of change across the organization is expected to lead to more consistent growth in the future.
RBC Capital Markets maintained an outperform rating on Target and raised the price target to $153 from $132.
Price: $121.59, Change: $-0.74, Percent Change: -0.60%