Target (TGT) is showing early signs of a potential multi-year turnaround after a strong start to 2026, with UBS Securities saying the retailer's transformation has multiple stages beyond the initial comp recovery.
The company tied Q1 outperformance directly to category changes already made in areas such as Baby, Health & Wellness and Food, while flagging that many categories will not see meaningful improvement until 2027, the brokerage said in a note Thursday.
UBS said the strategy recenters Target on curated, design-led assortments for its core busy-family demographic, the formula that originally helped the retailer scale to over $100 billion in sales. It said the setup points to a longer runway for improvement beyond 2026.
The investment firm said sustained traffic growth will be key to maintaining momentum and driving further upside and estimates risk/reward is favorable at current levels, based on a calendar 2027 EPS estimate of about $9.50.
UBS has a buy rating on the stock and a price target of $144.
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