TGT - Target: Remains A Compelling Compounder Despite The Recent Rally

2024-04-02 09:00:00 ET

Summary

• Target has charted an impressive YTD rally of +24%, with it well outperforming the wider market at +10%, WMT at +14%, and COST at +10%.
• Despite so, we believe that TGT remains fairly valued, as it laps up the favorable YoY comparison, while delivering a healthier balance sheet and promising FY2024 guidance.
• Moving forward, we expect to see the retailer deliver further excellence, as the management intensifies the membership base growth while expanding the e-commerce revenue share.
• With an increasing e-commerce TAM and enhanced operational efficiency, we believe that TGT remains well positioned for consistent top/bottom-line growth and robust shareholder returns.

We previously covered Target ( TGT ) in September 2023, discussing how the management had demonstrated great capital deployment across capex investments, deleveraging, shareholder returns, and balance sheet enhancement....

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