Is There Still a Market for Target? 1 and can accesss 1

“I love to go shopping at Target. They have so much stuff there, you can buy almost anything, it’s really amazing.” — Liv Tyler

Chart of the Day

Good morning!

I remember when I was in college, “Tarjay” was the hot place to go. Sure, that might have been partially because I went to a smaller school in the Midwest and there wasn’t all that much to do nearby, but it was still obvious that Target offered an elevated shopping experience, compared to, say, Walmart. 

Mood lighting, shelves stacked neatly organized with endless trendy products, mostly affordable prices, and if you were lucky, a Starbucks inside—those were the hallmarks.

I try to go back whenever I’m visiting Ohio, but it just doesn’t hit the same way anymore. And I’m not alone in that view. 

Target’s earnings this morning further alienated investors away from the retailer. Shares fell 11% in pre-market trading. Sales fell again, and the company has finally decided on a new chief executive.

Since their late 2021 all-time high, shares have more than halved. The declines have accelerated this year, down 20%, lagging far behind the S&P 500’s 9.2% gain. Shares are also underperforming peers: Walmart’s are up 13% over the same period, Dollar General has advanced 49%, and Kroger has added 14%. 

Currently, the percentage of analysts recommending Target as a buy are at 30.8%—only slightly above the 30% noted in May and June—and the lowest level since 26.9% in November 2018, according to Bloomberg data as of Tuesday.

The average 12-month price target is at $105.17. Shares closed Tuesday at $105.36. 

What happens to Target is important to watch because it can serve as a signal for how consumers are feeling about other staple companies, especially the cheaper ones. 

Home Depot earnings yesterday showed that the tariffs might contribute to higher prices, but spending on home improvement might get better. Shares finished up 3.2% Tuesday. Lowe’s and TJ Maxx also report this morning. Walmart’s earnings are tomorrow. 

Target has floundered over the past four years for a whole bunch of reasons. Overflowing with inventory during the early Covid years, it had to amp up its promotions activity, but consumer spending soon shifted to experiences over goods. It also started battling with a wave of shrink, which pushed the company to lock up its products, further agitating consumers. Its pullback from DEI activity only made it worse, as it sparked a backlash from existing customers while failing to win over enough anti-DEI consumers to make up for it. 

To be clear, it’s not just consumers who are frustrated. 

In early June, a companywide survey showed that roughly half of Target’s employees didn’t think the company was making the changes necessary to compete effectively, according to a WSJ story. Leadership challenges have not improved.

Like for most other things, tariffs are likely going to exacerbate Target’s problems because roughly half of its merchandise is imported.

When analysts are this bearish on a stock, it is typically considered to be a contrarian indicator. Think about what happened to UnitedHealth Group earlier this month. Let’s see if Target can follow suit by convincing investors that it has a strategy to get out of this hole it has dug itself into. 

Share your thoughts

Have you enjoyed shopping at Target lately? Click here to send us your response.

📧✍️Here’s what a reader commented📧✍️

Question: Do you feel like there’s an intensifying difference between how wealthier and poorer consumers experience the economy?

Answer: Clearly. Anyone who doesn’t see life becoming more difficult especially for lower income people has either too much money or doesn’t care. 

Catch up with FS Insight

As we enter the final third of 2025, we think the prominent changes are the Fed is dovish and the ISM recovers to above 50. This sets up for stocks to finish 2025 strong.

Technical

Tuesday proved to be one of those days where the negative action in Technology helped to camouflage the bullish price activity in the broader market.

Crypto

SOLBTC held firm (-50 bps) vs ETHBTC (-250 bps) yesterday. Solana feels under-owned despite being a past cycle favorite. Bullish’s IPO proceeds ($1.15B in stablecoins, largely minted on Solana) could help pull SOL into the stablecoin/RWA fight.

News We’re Following

Breaking News

• Elon Musk Pledged to Start a Political Party. He Is Already Pumping the Brakes. WSJ
• Target Bets a Lifelong Employee Can Steer Its Turnaround WSJ

Markets and economy

• Investors warn of ‘new era of fiscal dominance’ in global markets FT
• A New Force Is Driving Dollar Weakness BR
• Scott Bessent bets on stablecoins to bolster demand for Treasuries FT
• Tuesday was a key day, as momentum plays flopped while value stocks rallied. But was it a shift or a blip? MW
• Nearly 50% of adults are now ordering kids’ meals. ‘It’s economical and it’s filling.’ MW

Business

• McDonald’s to Cut Combo Meal Prices After Convincing Franchisees WSJ
• Lowe’s beats on quarterly earnings, buys home pros business for $8.8 billion CNBC
• Databricks says it’s valued at over $100 billion in latest funding round CNBC
• Robinhood launches NFL and college football prediction markets CNBC
• Figma rival Canva valued at $42bn as IPO rumours swirl FT

Politics

• How Europe Learned to Speak So Trump Would Listen NYT
• Texas Republicans Ready to Pass New Redistricting Maps, Just as Trump Wanted NYT

Overseas

• China military parade to show off hypersonic missiles and autonomous weapons FT
• The Japanese city betting on immigrants to breathe life into its economy FT

Of Interest 

• Walmart shrimp may have been exposed to radioactive material, FDA says CNBC
• Pop Mart shares reverse course to rise 10% after Labubu-maker posts near-400% profit surge CNBC