Target May Have Missed Estimates, But Its Aim Still On Point

Target Corporation TGT has lost more than $6 a share following its Q1 earnings results on Wednesday morning. While weather has been to blame for virtually all retailers this earnings season, Credit Suisse believes Target can overcome these issues.

"It's probable that when the weather cooperates, sales will improve, but it also illustrates that even the slightest distraction can lead the consumer to pull back," Michael Lasser said in a note Thursday. "Target's results are sensitive to this. Though cooler weather in May sets it up for a bumpy 2Q, we think the retailer's continued innovation in its signature categories and its investments in digital should help it regain some of its luster in 2H."

The analyst was encouraged by Target's modest operating margin expansion, and also believes the company is making progress on the grocery side of things.

Credit Suisse holds a Neutral rating and cuts its price target on the stock from $82 to $73.

Shares closed Thursday at $67.05.