Target Corporation (TGT): A Bull Case Theory

We came across a bullish thesis on Target Corporation on LongYield’s Substack. In this article, we will summarize the bulls’ thesis on TGT. Target Corporation's share was trading at $90.62 as of November 28th. TGT’s trailing and forward P/E were 10.98 and 11.48 respectively according to Yahoo Finance.

Target Corporation operates as a general merchandise retailer in the United States. TGT is at a critical inflection point as it navigates a challenging consumer environment, but the company presents a compelling bullish case for investors willing to focus on strategic transformation and technology-led growth. Operating nearly 2,000 U.S. stores alongside a growing e-commerce presence, Target combines owned and national brands with fulfillment services like Drive-Up, Order Pickup, and Shipt, which together accounted for more than a third of digital sales and grew over 35% in Q3 2025.

While headline sales have been pressured by declining discretionary spending, gross margins slipping to 28.2%, and comparable sales falling 2.7%, these short-term headwinds mask underlying strength. Advertising revenue surged 44%, and the Target Plus marketplace grew nearly 50%, highlighting the potential of digital and media initiatives to drive future growth. The appointment of Michael Fiddelke as CEO positions Target to execute a bold turnaround: he has already eliminated 1,800 corporate roles to streamline decision-making and plans a $5 billion investment in store remodels, supply-chain upgrades, and technology, including AI-powered merchandising, inventory management, and conversational commerce via ChatGPT.

These initiatives aim to restore Target’s design-led merchandising authority, enhance the guest experience, and accelerate digital engagement. With a strong owned-brand portfolio, robust fulfillment infrastructure, and growth in same-day services, Target’s assets are undervalued relative to peers, trading at a significant discount to its historical forward multiple. If Fiddelke successfully executes his strategy, improving traffic, margins, and digital penetration, Target could see a meaningful rerating, making it a high-conviction opportunity for investors seeking exposure to a resilient, tech-forward retailer with long-term upside.

Previously we covered a bullish thesis on Target Corporation (TGT) by LongYield in May 2025, which highlighted the company’s resilience amid a tough retail environment, digital momentum, and strong capital deployment. The company's stock price has depreciated approximately by 3.89% since our coverage. The thesis still stands as Target’s omnichannel strengths and long-term strategy support recovery. LongYield shares a similar perspective but emphasizes CEO Fiddelke’s technology-driven turnaround and AI initiatives as key rerating catalysts.

Target Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held TGT at the end of the second quarter which was 62 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.