UPDATE: Citigroup Initiates Coverage On Target Corporation

In a note released Monday morning, Citigroup analyst Oliver Chen initiated coverage of Target Corporation TGT at Neutral with a $66 price target.

Chen commented, "In our view, Target is taking right steps to improve execution, but we believe the stock offers fair risk/reward with valuation at three year highs."

Looking for upside, Chen noted that Target is focused on "rejuvenating newness" in its owned/exclusive partnership merchandise. However, he views the macro trend of a "lackluster" increase in household disposable income as a headwind for the company.

Looking ahead, Chen is forecasting an EPS of $0.48 for the third quarter and $3.20 for fiscal 2015.