Target Corporation (TGT): A Bull Case Theory

We came across a bullish thesis on Target Corporation on Business Invest’s Substack by Francesco Ferrari. In this article, we will summarize the bulls’ thesis on TGT. Target Corporation's share was trading at $95.98 as of August 29^th. TGT’s trailing and forward P/E were 11.19 and 13.05 respectively according to Yahoo Finance.

Target Corporation (TGT) has seen a sharp decline, down roughly 65% from its 2021 highs, drawing attention during its latest earnings release. Initial analysis suggested an asymmetric risk-reward setup, with a bear scenario near $86 and a bull case of $205, underpinned by modest assumptions for sales growth, forward margins, multiples, and buybacks. This superficially attractive setup briefly tempted an investor, but deeper qualitative analysis revealed several warning signs. These included a CEO transition with minimal insider ownership, flat to negative comparable store sales, declining transaction volumes, stagnant digital sales since 2022, and weakening pricing power amidst inflation and looming tariffs.

Market share losses across multiple categories further highlighted underlying operational challenges. Risk assessment tools flagged at least 17 yellow and red indicators, while management commentary on operational levers was vague and unconvincing, with odd prioritization of dividend policy and avoidance of buybacks. These factors implied that relying purely on multiples to justify upside could be misleading, potentially creating a value trap, with revised risk-reward scenarios dropping the bear price to $60 and the bull case to $160. Ultimately, the exercise highlighted the tension between short-term valuation appeal and long-term operational reality.

The investor recognized the pull of quick value trades but reaffirmed adherence to principles and a disciplined investment style, emphasizing that potential short-term gains should not override rigorous analysis and alignment with a consistent, quality-focused strategy. Target’s situation underscores the importance of integrating quantitative risk-reward metrics with qualitative business assessment to avoid misjudging fundamentally challenged stocks.

Previously we covered a bullish thesis on Target Corporation (TGT) by LongYield in May 2025, which highlighted digital momentum, cost control, and long-term strategy despite near-term sales weakness and margin pressures. The stock has appreciated roughly 1.7% since then. Francesco Ferrari shares a similar approach but emphasizes deeper operational risks, management concerns, and the potential for a value trap despite attractive multiples.

Target Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 62 hedge fund portfolios held TGT at the end of the first quarter which was 56 in the previous quarter. While we acknowledge the potential of TGT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.