BofA analyst Robert F. Ohmes upgraded Target Corporation (NYSE: TGT) to Buy from Neutral, raising the price target to $135 from $120.
The analyst remains remarkably upbeat about the company's Gross Margin upside opportunities, likely to be generated from freight & transportation cost recovery and the non-recurrence of various inventory reduction costs.
In addition, the continued rollout and ramp-up of flow centers and sortation centers and the shift back to more profitable in-store and same-day digital transactions are likely to boost gross margins, writes the analyst.
TGT shares have declined 19-20% since the end of July (vs. the S&P down -5%), and with the stock trading at just 12x 2yr forward earnings, Ohmes thinks