Robert W. Baird has dialed back its enthusiasm for Target, downgrading the retail heavyweight from ‘Outperform’ to ‘Neutral’ and assigning a new price target of $110. The change comes amid mounting concerns around slowing earnings growth and uneven performance in key product categories.
$TGT has struggled with softness in discretionary spending, particularly in home goods and apparel — two historically strong pillars of its revenue mix. In its most recent quarter, profits fell 12% to $854 million, and while comparable sales nudged up slightly, it wasn’t enough to offset concerns over rising costs and inventory challenges. Preemptive stockpiling to hedge against a potential port strike also added to operational pressures.
Although Target has built a reputation for resilience, the downgrade signals a more cautious view on its near-term ability to reignite growth, especially in a competitive and cost-sensitive retail environment.
💰 Dividend Fundamentals: 🟡 Dividend Yield: Around 4.75%, offering a high level of passive income 🟡 Payout Ratio: Near 50%, meaning half of earnings are distributed to shareholders 🟡 Dividend Growth: A 1.8% recent bump keeps alive its impressive streak — 228 consecutive payouts since its IPO in 1967
While the dividend profile remains a bright spot for income-focused investors, the road ahead for $TGT looks more challenging. The downgrade serves as a reminder that even well-loved retail names can face tough stretches when consumer patterns shift and cost pressures intensify.