What Happened?
Shares of general merchandise retailer Target (NYSE:TGT)
jumped 4.5% in the morning session after second-quarter results beat on sales and the company raised full-year guidance, helped by a large tariff refund. Target said net sales rose 5.3% to $26.5 billion, with comparable sales up 3.8% (stores +2.7%, digital +8.7%). GAAP and adjusted EPS doubled to $4.11 from $2.05. A pretax IEEPA tariff refund of $994 million added $1.65 to EPS; excluding that, EPS was still up about 20%.
CNBC had modeled about $26.14 billion in sales and $2.33 in adjusted EPS excluding the refund. Target now expects full-year sales growth around 5% and EPS of $9.90–$10.90, including the $1.65 refund. Strip out the refund and the midpoint of the new EPS range is still $0.75 above the prior $7.50–$8.50 guide, so the raise is not only the one-timer.
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What Is The Market Telling Us
Target’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 16 days ago when the stock gained 3.1% on the news that continued momentum fueled by positive analyst sentiment and a broader market shift toward consumer staples. The stock's rise was supported by several favorable analyst actions.
Gordon Haskett raised its price target to $170 with a "Buy" rating, while Wolfe Research upgraded the stock to "Outperform." Additionally, Jefferies increased its price target to $161, and Wells Fargo maintained an "Overweight" rating, lifting its target to $165. The positive momentum was also fueled by a broader market trend where investors moved into consumer staples stocks, which are often seen as more stable investments.
This sentiment was echoed on CNBC's "Halftime Report," where Stephanie Link of Hightower Advisors named Target as her "final trade." These developments follow the company's recent dividend increase and upgraded fiscal year 2026 earnings guidance.
Target is up 60.6% since the beginning of the year, and at $161.43 per share, it has set a new 52-week high. Despite the year-to-date gain, investors who bought $1,000 worth of Target’s shares 5 years ago would now be looking at only $657.81.
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