Bank of America has downgraded its third-quarter sales forecast for Target Corp (NYSE:TGT) ahead of the retail giant’s third-quarter earnings.
BoE previously anticipated 2% year-on-year sales growth, but analysts now expect to see no top-line growth for the quarter.
The bank’s lowered outlook reflects a deceleration in observed sales data from Bloomberg Second Measure (BSM) over the quarter.
Target's increased Target Circle Card penetration could provide an upside, said BoA analysts, while digital sales are expected to outperform in-store sales.
Target’s focus on value, according to BoA, positions the company favorably for potential market share gains through various initiatives.
BoA anticipates gross margin expansion in the second half of 2024, supported by vendor cost improvements and increased Roundel revenue.
The bank reiterated its ‘buy’ rating on Target shares, with a price target of $195 against a current price of $155.37.
Target’s third-quarter results are due on November 20.