Target Corporation (NYSE:TGT)'s third quarter 2023 same-store sales growth could modestly disappoint when the retailer reports its results on November 15, given moderating food-at-home inflation and macro challenges, according to BofA Securities analysts.
In an update to clients, the analysts wrote that they also expect Target to give cautious commentary on the consumer, discretionary spending, the holiday selling season, and its fiscal 4Q sales.
They do, however, see gross margin upside opportunities from factors such as the non-recurrence of inventory costs last year, the rollout of sortation centers, as well as the continued shift back to more profitable in-store and same-day digital transactions.
Also, analysts at BofA believe Target’s store traffic could continue to improve into 4Q and next year with potential drivers including the addition of Starbucks, returns to Drive Up and continued store remodels.
They maintained their ‘Buy’ rating and $135 per share price objective on Target stock.
Shares of Target rose 3% to $110.75 in late-afternoon trading on Tuesday.
Contact Sean at sean@proactiveinvestors.com