Target has worked aggressively this year to win back customers after a challenging period of consumer boycotts over its Pride collection and the scaling back of its DEI (diversity, equity, and inclusion) initiatives. 

Last year’s boycotts hit Target’s net sales, which have declined 1.7% to $104.8 billion for the full 2025, reflecting a 2.6% decrease in comparable sales, according to the company’s 8-K filing with the Securities and Exchange Commission. 

Over the last six months, the retailer made several bold moves, including expanding its hemp-derived THC beverage offering across three more states (Florida, Texas, and Illinois) and focusing on community and merchandising authority. 

Since the beginning of the year, Target’s shares gained 24.28%, currently trading $121.48 per share. At the same time, its foot traffic has been improving each month, according to data from Placer.ai. In February, March, and April, Target monthly store visits grew 7.8%, 7.3%, and 5.5%, respectively. 

To rebuild its reputation, Target started the year with the key executive change, appointing Michael Fiddelke as its new CEO. Fiddelke quickly made strategic moves, launching a massive $5 billion “New Chapter” overhaul, streamlining the shopping experience by organizing store layouts, curating a premium product selection, and accelerating fulfillment and delivery services.

The extent to which these moves and increased visits impacted Q1 results will be revealed when the company reports results on Wednesday, May 20, 2026. In the meantime, the company has provided its own outlook for the year, and analysts have their takes ahead of earnings. 

Target’s outlook for 2026

In its latest earnings report for the fourth quarter and full year 2025, the company released the following outlook for 2026.

  • It projects net sales growth of about 2% compared with 2025. The company based its projections on a small increase in comparable sales, with new store and non-merchandise sales contributing more than 1 percentage point of growth. 
  • Target expects to grow net sales in every quarter of the year.
  • The company anticipates a full-year 2026 operating income margin rate approximately 20 basis points higher than 2025’s 4.6% adjusted operating income margin rate.
  • Q1 GAAP and Adjusted EPS is expected to be flat to up slightly from last year’s adjusted EPS of $1.30, with stronger year-over-year EPS growth expected through the balance of the year.
    Source: Target earnings report 
Bank of America raises its Target stock price target ahead of earnings.

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Bank of America raises its Target stock price target

Bank of America analyst Christopher Nardone and his team updated their opinion on Target stock ahead of earnings.

Despite a likely good start to the year, the analysts, in a research note shared with TheStreet, maintain a rather cautious view on the stock. Nardone is worried that shopping will slow down once tax refund money is spent and high gas prices start to hurt consumers’ budgets.

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Analysts also warned of pricing tailwinds from tariffs in the second half of 2026. They also expect the company to provide a balanced tone in its outlook if there’s no relief in gas prices by the time Target reports earnings on May 20, 2026. 

Nardone increased his first-quarter EPS by 6% to $1.42, including a 2% year-over-year increase in comparable sales. 

For the second quarter, the analyst highlighted several key things to keep in mind, according to the note.

  • A favorable, approximately $0.50 gross margin lap from order cancellations last year 
  • Home décor floor pad changes coming in June
  • A Nintendo Switch 2 lap in early June (in June 2026, Target faces a difficult year-over-year comparison as it attempts to “lap” the sales and foot traffic spikes generated by the Nintendo Switch 2 launch from one year ago)
  • Continued investments in selling, general and administrative expense (including wages and stores) 

Analysts further highlighted Target’s important partnerships in the first quarter of the year, such as Roller Rabbit, Intimately Free People, Andie Swim, and Parke. 

While Nardone is encouraged by early traction from these apparel collaborations, he thinks broader changes across other categories and investments in the store fleet need more time to show results. He also worries “that expectations on a swift EPS recovery could prove aggressive,” the note indicated.

Analysts added that immediate momentum on other categories outside of beauty and apparel could make them more optimistic about the stock. 

Nardone and his team also noted they expect comparable sales better than expected to be driven by apparel and accessories. 

Nardone reiterated an underperform (sell) rating for Target stock and raised the target price to $110 from $106, based on 14 multiple of his 2026 EPS estimate, which is slightly below Target’s 15-year average of 15x, given the outlook for comparable sales and margin pressure, the note confirmed.

Analysts noted downside risks for Target stock:

  • Higher-than-expected margin pressures from labor costs, markdowns, investments, and digital profitability 
  • More aggressive competition from competitors.

Disclosure: Nina Zdinjak holds no position in TGT. 

Related: Target executive unveils bold new plan to win back customers