Early Proof Points Building; We’d Buy Weakness

Research evidence excerpt

Early Proof Points Building; We’d Buy Weakness

USA | Discount Retailers

Target Corp EquityMayResearch20, 2026

ESTIMATE CHANGEEarly Proof Points Building; We’d Buy Weakness

TGT's Q1 delivered strong results, with traffic-led comps, broad-based category RATING BUY

strength, and multiple growth engines driving upside. Following these results, PRICE $127.24^

mgmt raised its FY guide despite a tougher 2Q setup (had highlighted difficult PRICE TARGET | % TO PT $140.00 | +10%

compares). That being said, we are encouraged by the results and see 52W HIGH-LOW $133.10 - $83.44

continued opportunity for TGT to witness OM expansion over time and would FLOAT (%) | ADV MM (USD) 99.1% | 619.72

be buying weakness. Raising our ests. MARKET CAP $58.0B

TICKER TGT

What We DID LIKE in the Quarter ^Prior trading day's closing price unless otherwise noted.

1) Broad-Based Strength. Q1 comps of +5.6% were driven primarily by +4.4% traffic, with strength

across all categories and both stores and digital. Digital comps increased by 8.9%, while stores rose FY (Jan) CHANGE TO JEFe JEF vs CONS

by 4.7%, reinforcing a multichannel recovery and signaling meaningful re-engagement with the core 2026 2027 2026 2027

customer.

REV +1% +2% +2% +2%

2) Multiple Growth Engines Are Now Contributing... Non-merch revenue grew nearly 25%, EPS +2% +3% +4% +2%

supported by Roundel ads, marketplace, and membership initiatives, while same-day digital

fulfillment remained a key driver (+27% growth). 2026 ($) Q1 Q2 Q3 Q4 FY

EPS -- -- -- -- 8.41

3) ... As Q1 Results Were Strong. GM expanded ~80bps Y/Y to 29.0%, driven by supply chain PREV 8.28

productivity, lower markdowns, and growth in higher-margin revenue streams. This was partially

offset by higher product costs. As a result, TGT reported Q1 adj.