Auspicious or Serendipitous; Remain Market Perform

Research evidence excerpt

Auspicious or Serendipitous; Remain Market Perform

May 20, 2026 | 18:39 ET~

Target

TGT-NYSE Rating Price: May-20 Target Total Rtn Food Retail

Market Perform $122.33 $130.00 10%

Kelly Bania Analyst

kelly.bania@bmo.com (917) 574-4796

Benjamin Wood VP Associate

Auspicious or Serendipitous; Remain Market Perform benjamin.wood@bmo.com (646) 874-3725

Legal Entity: BMO Capital Markets Corp.

2YR Price Volume Chart

Bottom Line: 180

We believe the implied potential slowing of comp momentum QTD and lack of EPS 160

flow-through from a modestly higher FY27 sales outlook pressured TGT shares today. 140

That said, we believe 1Q results seemed to highlight the near-term upside from store 120 7060

experience opportunities at Target, which is combining with softer comparisons in 100 5040

F27. Longer term, we remain cautious given rising competitive pressures from 3P 80 2010

marketplace platforms and believe a greater supply-chain investment may be needed. 60 Nov May Nov May 0

Remain Market Perform with $130 target. LHS: Price ($) / RHS: Volume (mm) Source: FactSet

Company Data in $

Key Points Dividend $4.56 Shares O/S (mm) 454.2

Stock Pullback Despite Strong Q1 Explained. We think TGT shares pulled back post Yield 3.7% Market Cap (mm) $55,560

1Q earnings for two reasons: 1) lack of commentary around the QTD trends alongside Net Debt (mm) $10,814 Wkly $Vol (000s) 9,402,754

commentary that 1Q comps were aided by tax refunds and easier comparisons; and 2) BMO Estimates in $

commentary that half of the +2% FY sales outlook increase was due to the 1Q upside (FY-Jan.) 2026A 2027E 2028E

and the other half due to a higher outlook for the remainder of FY27, implying there

Adj. EPS $7.57 $8.36↑ $8.75↑

should have been more flow through to FY27 EPS beyond the 1Q beat, but there is not,