Equity Snap: Target Corp (TGT US): The recovery continues

研报英文原文证据摘录

19 August 2026

Equity Snap: Target Corp (TGT

US)

Equities

Multiline Retail

The recovery continues

United States

◆ Strong Q2 results which comfortably beat expectations even

after stripping out tariff refunds; management pleased with

the turnaround and thinks that there is further to run

Target Corp (TGT US, USD152.48, Hold, TP USD125.00)

(Priced as of 18 Aug 2026)

A strong set of results: Total net sales came in at USD26,539m, +5.3% y-o-y

comfortably ahead of HSBC and consensus. Performance in the quarter reflects

comparable sales up 3.8% with a 2.7% increase in store-originated sales. It was mainly

traffic driven (up 3.6%). Profit was helped by tariff refunds of USD994m. Strip this out

and, again, there was comfortable outperformance vs HSBCe/consensus. We show full

details in the table overleaf.

Joe Thomas*

Senior Analyst, Head of Equity Research Mexico

HSBC Mexico, S.A., Institucion de Banca Multiple, Grupo

Financiero HSBC

Guilherme Domingues*

Analyst, US Consumer Staples

Banco HSBC S.A.

Saket .*

Associate

Bangalore

* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

not registered/ qualified pursuant to FINRA regulations

Guidance raised: Reflecting this strength, the group raised its guidance for the year. It

now expects net sales growth of c5%, one percentage point higher than the prior

indication. This compares with HSBC's total sales growth of 2.8% and consensus of

4.2%. This is filtering through to margins: Target expects operating margin of c.6%,

including approximately 90bps of benefit from Q2 tariff refunds. Excluding this, full-year

operating income margin is expected to be c50bps higher than last year's 4.6% and is

ahead of HSBCe 4.8%/consensus 5.90%. Meanwhile, the company updated its GAAP

and Adjusted EPS guidance to USD9.90-10.90, which includes second quarter tariff

refund benefits of approximately USD1.65, from its prior guidance of USD7.50-8.50

(this compares to HSBC Adj EPS of USD8.26 and consensus of USD8.55).

Further to run: The Q2 performance comes against soft comps of -1.9% and means

that, on a 2-year basis, the business is growing at 1.8% (vs. 1.6% in Q1). At Q1, it said

…