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On Wednesday, Deutsche Bank the goal Corporation (NYSE:) changed the rating on the stock from “hold” to “buy” and raised the price target to $206 from $149.
The move comes as the bank forecasts several growth drivers for the retail giant, including expected sustained same-store sales (SSS) growth and earnings before interest and tax (EBIT) margin expansion. It was conducted. Due to these factors, we expect earnings per share (EPS) to exceed $10 in the near future.
According to Deutsche Bank, Target's strategic initiatives are key to driving sales growth. These initiatives include a broader value assortment of fashion products such as his partnership with designer Diane Fung Furstenberg and the introduction of cost-effective product lines. The company also plans to enhance its loyalty program, launch a new membership program and open 300 new stores over the next 10 years.
The bank recognized the competitive landscape of membership services with established programs such as Amazon (NASDAQ:) Prime, Walmart+, and Kroger (NYSE:) Boost. But the company sees the potential in Target's new membership approach, called “Target Circle 360,” to generate a stable revenue stream, strengthen customer loyalty and wallet share, and justify a higher valuation multiple. ing.
Deutsche Bank also cited limited discount risk, potential freight cost benefits and growth in its digital advertising business as factors supporting margins. The bank believes that even though Target's stock price has risen over the past three months, it still has the potential to rise at least 20% from current levels. This rating is based on the expectation that Target's valuation remains lower than other large retail peers and that the stock's price performance may match or exceed market multiples. .
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