Target Faces More Challenging Risk/Reward Outlook Heading Into 2027, BofA Says

11:13 AM EST, 11/09/2026 (MT Newswires) -- Target (TGT) faces a more challenging risk/reward outlook heading into its fiscal Q3 results, as concerns over the sustainability of strong comparable sales growth and the pace of earnings revisions raise questions about its prospects heading into 2027, BofA Securities said in a Monday note. The analyst raised its Q3 comparable sales growth forecast to 4% from 3%, citing strength in beauty and discretionary categories, but cut its earnings per share estimate by 9 cents to $2.08 due to lower gross margins and higher selling, general and administrative expenses. The investment firm remains concerned about the sustainability of sales momentum and margin pressures heading into 2027, while a strong start to the early holiday selling season could support near-term valuation. BofA sees pressure from tougher sales comparisons, higher freight costs and promotions, with limited room to cut operating expenses amid ongoing investments. It also flagged risks to the apparel turnaround while pointing to continued strength in beauty. The investment firm remains concerned about the sustainability of sales momentum and margin pressures heading into 2027. However, a strong start to the early holiday selling season could support near-term valuation. Target is scheduled to report its Q3 results on Nov. 18. BofA reiterated its underperform rating on the stock while raising its price objective to $141 from $140. Target shares were up nearly 4% in Monday trading. Price: 164.62, Change: +6.21, Percent Change: +3.92