Target (TGT) is set to report first-quarter earnings on May 20 before the market opens, and the stock enters the release with a noticeably stronger chart. Shares are up more than 27% year-to-date as investors have warmed to CEO Michael Fiddelke’s reset plan and the company’s efforts to rebuild traffic, refresh stores, and lean harder into technology and merchandising changes.
The move has not been driven by momentum alone. Target’s stock also jumped nearly 7% after its March 3 fourth-quarter report, when management paired a profit beat with a 2026 outlook that pointed to a return to sales growth. That helped shares to gain more than 27% year-to-date (YTD). It looks like the company may finally be stabilizing after a long and difficult stretch.
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Even after the rally, Target does not look especially expensive, but it is not obviously cheap either. The stock trades at about 15 times trailing earnings and roughly 6.8 times EV/EBITDA, compared with a five-year average EV/EBITDA of around 8.2.
www.barchart.com Heavy Spending Is Central to the Reset
Target is not trying to fix the business on the cheap. The retailer is investing more than $2 billion in incremental spending this year, part of a broader $5 billion capital plan aimed at new stores, remodels, faster same-day delivery, and a better in-store experience.
That spending shows how much work still remains. Management has been clear that the strategy is about more than cutting costs or trimming distractions. It is trying to rebuild the shopping experience, improve execution, and make the brand more relevant again in a highly competitive retail market.
Executives said sales and traffic trends improved late in the fourth quarter, and February delivered a healthy sales increase. That gave bulls a reason to believe the business may be finding a floor after a rough run.
Q1 Will Show Whether the Recovery Is Real
Target’s latest quarterly results were mixed, but not bad enough to derail the rally.
In the fourth quarter of fiscal 2025, the company reported adjusted earnings of $2.44 per share, topping estimates of $2.16. Revenue came in at $30.5 billion, down 1.5% from a year earlier and slightly below expectations. Comparable sales fell 2.5%, store traffic remained under pressure, and digital sales rose 1.9%. For the full year, adjusted earnings per share came in at $7.57, down from $8.86 a year earlier.
The bigger question now is whether the improvement seen late in the fourth quarter and into April can show up in first-quarter results. Target’s own outlook calls for about 2% net sales growth in 2026, a modest improvement in operating margin, and full-year EPS of $7.50 to $8.50. Management also said first-quarter EPS should be flat to slightly higher than last year’s adjusted $1.30, and analysts expect $1.37 per share, which could be around a 5% increase year-over-year.
That makes the May 20 report a key checkpoint. Investors will be looking closely for signs that traffic is improving, the mix is getting better, and the company’s investment plans are beginning to translate into real sales momentum.
What Analysts Say About TGT Stock?
Analysts remain split between cautious optimism and patience. According to Barchart, Target has a consensus “Hold” rating and an average price target of about $128.60, slightly above the current share price, though the range was wide at roughly $88 to $160.
At the more bullish end, Morgan Stanley reiterated an “Overweight” rating and a $145 target in April. Telsey Advisory also raised its target to $148 and kept an “Outperform” rating, arguing that early execution gains in the transformation plan are starting to matter.
To put it simply, that's the question that weighs on Target as it nears earnings, not whether it's going to survive. It's asking if the retailer can turn to the positive side of growth now. The answer on May 20 will determine if the stock has had its fill of the turnaround story or if there's still plenty of room to go up.
www.barchart.com On the date of publication, Nauman Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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