Gonna Fly Now? Brian Sozzi Says Target Will Get Up Off The Mat (TGT, URBN)

Brian Sozzi of Wall Street Strategies is out with a

on Target

and Urban Outfitters

, as both names are at or near 52 week lows. Sozzi says that Target will be the one to rebound, as the company is transitioning itself to have food be a larger percentage of its sales, renovations are taking place across the U.S. and the company is expanding into Canada. Sozzi writes that Target will be the one to rise like Rocky Balboa and get back off the mat. "There has been a rotation into valuation calls in retail since the beginning of the year as opposed to investors hopping on the growth train. Assuming Target hits its 52-week low, the stock will trade on a forward P/E multiple of 10.4x, about five points below the market's multiple, a solid discount to the peer group, and a 30% discount to the five-year mean P/E multiple on Target. The stock will yield a shade over 2%. Urban Outfitters, on the other hand, assuming it reaches a 52-week low will trade basically on par with the market's P/E multiple and on premiums to its peer group on a P/S and P/B basis. The market still has some premium to wring from Urban Outfitters, less so the case with Target," Sozzi writes. Sozzi notes that Target has a few near term catalysts, whereas Urban Outiftters does not. "First, valuation is at that point where analyst upgrades are likely to be triggered. Second, comps, though below management's plan for the fourth quarter, are continuing to be in the plus column and could surprise to the upside on 5% Rewards, increased grocery penetration, and inflation. Third, Target's $6.1 billion credit card receivable portfolio is likely to be sold before the end of the year, in my view leading to a new share repurchase program and or a dividend increase," Sozzi writes. If you believe that Sozzi is correct, and that Target is likely to get "back up off the mat" as the Italian Stallion did in the movies, then perhaps Target will give your portfolio the "Eye of the Tiger" and it's shares are "Gonna Fly Now." You'll have to excuse me, as I now have a sudden urge to go chase a chicken around and run up a mountain in Russia.