Optimistic about risk-reward development trends Oppenheimer restores Target (TGT.US) preferred rating

The Zhitong Finance App learned that Oppenheimer believes that although Target (TGT.US)'s third-quarter results were disappointing and the outlook for fiscal year 24 was lowered, the prospects for the company's stock to reach the target price of $165 have improved, so it will revert to the preferred stock rating and maintain its “outperforming the market” rating. Oppenheimer analyst Rupesh Parikh (Rupesh Parikh) said Target “is developing a very compelling risk/reward scenario,” and pointed out many favorable factors, such as the stock's attractive buying point, expected fourth quarter guidance, 6% operating margin, and an “attractive” dividend yield of 3.52%.

Investors' sentiment towards Target seemed “too negative,” which also explains the company's 23% drop after issuing guidance. However, Parick believes that this forecast reflects the reduction in the number of shopping days during the holiday shopping season, the risk of price cuts, and adverse factors in non-essential categories, but all of these are temporary, so Parik is optimistic about Target for a long time.

“We believe that through digital efforts, store investments, successful sales in exclusive brands, gradual elimination of competitors, and collaboration with other brands and retailers, the company will be in a good position to seize market share,” Parick said. He advised investors to take advantage of the low stock price to buy the stock.

Target, along with Church & Dwight (CHD.US), Costco (COST.US), Freshpet (FRPT.US), SharkNinja (SN.US), and Walmart (WMT.US), became Oppenheimer's first choice.