RBC Raises Price Target on Target to $132 Ahead of Q1: Is the Turnaround Finally Resonating?

Quick Read

RBC Capital raised Target (TGT) stock’s price target to $132 from $130 with an Outperform rating, signaling confidence that turnaround efforts are resonating before Q1 earnings.

RBC’s upgrade ahead of Q1 earnings reflects momentum from Target’s turnaround efforts, though shares are already up 32% year-to-date and Target faces competitive headwinds as comparable store sales remain challenged.

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RBC Capital analyst Steven Shemesh raised the firm’s price target on Target (NYSE:TGT) stock to $132 from $130, maintaining an Outperform rating ahead of next week’s Q1 FY2026 earnings report. The firm stated it is “cautiously optimistic that turnaround efforts are beginning to resonate with the consumer.”

A $2 bump rarely moves the needle on its own. The story here is timing and tone: RBC nudged higher before the report on a name that has been a multi-year turnaround project, hinting that the bar for Q1 is rising.

The Analyst’s Case

Shemesh’s “resonating with the consumer” phrase reflects momentum building since late last year. Target closed Q4 FY2026 with adjusted EPS of $2.44, beating consensus of $2.16 by 13%, while gross margin expanded 40 basis points to 27%.

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CEO Michael Fiddelke also noted that “Target saw a healthy, positive sales increase in February, serving as an important milestone on our path back to growth this year.” RBC appears to be leaning into that signal, plus growth in non-merchandise revenue, which rose more than 25% on Roundel ads, marketplace, and membership.

Company Snapshot

Target operates nearly 2,000 stores across the U.S., with brands spanning Target Circle, Target Circle 360, Roundel, and Drive Up. The company carries a market capitalization near $57.2 billion and just declared its 235th consecutive quarterly dividend.

Management guided FY2026 EPS to $7.50 to $8.50 and projected net sales growth in every quarter of 2026. For Q1, the company expects EPS flat to up slightly versus prior year’s adjusted $1.30.

Why the Move Matters Now

The catch with this analyst upgrade is that Target stock has already run hard. Shares were up roughly 32% year-to-date as of last week, so the turnaround thesis may be partly priced in.

Target trades at a P/E ratio of 16x with a 3% dividend yield and a 3.47% dividend yield. Consensus sits at $126.03, so RBC’s $132 target carries the firm above the Street average.

What It Means for Your Portfolio

The bull case for Target stock rests on continued margin recovery, traffic stabilization, and the high-margin Roundel and membership engines compounding. The apparel refresh and home category investments are central to defending Target’s “discount with style” positioning. For broader context on retail analyst action, see our recent roundup of analyst upgrades and downgrades.

The bear case is real. Comparable store sales still declined 4% in Q4, transactions fell 3%, and consumer trade-down continues to favor Walmart (NYSE:WMT) and off-price competitors like TJX Companies (NYSE:TJX).

For prudent investors, the analyst upgrade signals that Wall Street sentiment is warming. With expectations now elevated heading into Q1, a measured TGT stock position size could let long-term holders participate while leaving room to add if the report disappoints.

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