Barclays Maintains 'Underweight' on Target (NYSE: TGT) Despite Price Target Hike

• Barclays' Mixed Outlook: Analyst firm Barclays maintained an "Underweight" rating on Target (NYSE: TGT) but increased its price target to $140.00 from $115.00, even as the stock traded at $161.30.
• Strong Q2 Performance: Target surpassed earnings and sales estimates, reporting 5.3% overall sales growth, 3.8% comparable sales growth, and an 8.7% increase in digital sales.
• Financial Outlook Boost: A significant tariff refund of $1.65 per share contributed to an improved adjusted operating margin of 9.6% and led Target to raise its full fiscal year 2026 revenue and EPS guidance.

On August 19, 2026, analyst firm Barclays maintained its "Underweight" rating on the Target (NYSE: TGT) stock. Target, a major general merchandise retailer in the United States, competes with other large retailers in the competitive retail sector. Despite the cautious analyst rating, Barclays increased its price target on Target to $140.00 from $115.00, while the stock was trading at $161.30.

The "Underweight" rating suggests that Barclays believes Target may underperform compared to other stocks in its sector. This view exists even as the Target stock price is significantly above the new $140.00 price target. This implies the firm sees the stock's current valuation as too high, despite recent positive market performance and a 60% rally in 2026.

Barclays' decision to raise its price target is supported by Target's strong recent financial performance. The company surpassed its second-quarter earnings and sales estimates, with overall sales growing 5.3%, as highlighted by Zacks. This robust growth comes from a 3.8% increase in comparable sales, a key retail metric measuring sales growth in stores open for at least a year.

The company's performance is further driven by an 8.7% advance in digital sales, boosted by over 25% growth in same-day delivery services, showcasing strong e-commerce expansion. Following these impressive results, Target raised its financial outlook for the full fiscal year 2026. Management now expects revenue growth between 4% and 5% and adjusted earnings per share (EPS) between $9.90 and $10.90.

A significant factor in the strong quarter was a tariff refund, as highlighted by GuruFocus. This refund added about $1.65 per share to earnings and was recorded as a reduction to the cost of sales. This greatly improved the company's adjusted operating margin, a key profitability metric, which rose to 9.6% from 5.2% a year ago.