Target Corporation (NYSE:TGT)’s recent pullback is more on the mark for Morgan Stanley, which upgraded the stock.
The Analyst
Morgan Stanley’s Simeon Gutman upgraded Target from Underweight to Equal-weight with a $67 price target.
The Thesis
Morgan Stanley sees less downside following a drop of about 15 percent in the value of Target’s stock.
“We still have concerns around TGT’s medium-term margins, but they seem to be reflected in the stock’s below-average valuation and risk/reward now looks more balanced,” Gutman wrote in a Monday note to investors.
The stock had run up in the last couple of years, but pulled back in the past month.
Gutman also likes Target’s emerging story as a retail “survivor,” along with a few other retail giants, as other smaller operations struggle to compete amid the shift to online buying. Target has made investments to promote traffic in-store and online and reduce costs and its top-line growth has been reinvigorated.
Price Action
Target's stock traded up 1 percent at $711.54 per share on Monday morning.
Related Links:
The Street Reacts To Target's Q4 Earnings, Analyst Day
What To Make Of A Messy First Quarter For US Retailers
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