Goldman Sachs Group, Inc. maintains a "neutral" rating on Target Corporation (TGT.US): Q4 core metrics are weak, strategic effectiveness remains to be observed.

Goldman Sachs Group, Inc. released a research report, maintaining a "neutral" rating on Target Corporation (TGT.US) with a 12-month target price of $97. The report pointed out that despite some investors being optimistic about its valuation advantage and the potential of having a low base for comparison in performance, the bank believes that the company's key operational indicators have been weak since the fourth quarter, and the effectiveness of the new management's strategic adjustments still needs to be observed over time. The bank stated that Target Corporation is currently facing multiple operational challenges. On the consumer demand side, Alphabet Inc. Class C search trends show that its search popularity in the fourth quarter (November-December) has been consistently lower than the previous two years, with no significant boost even during the Black Friday shopping season; Placer monthly store traffic data shows a 4.4% year-on-year decline as of December, an improvement from the low point in February but still in negative growth territory; Bloomberg Alternative Data shows that the company's adjusted sales in the fourth quarter have dropped by 6.8% year-on-year, further deteriorating from -2.6% in the third quarter. Consumer confidence indicators are also not optimistic. HundredX data shows that Target Corporation's Net Promoter Score (NPS) and Net Purchase Intent (NPI) reached a three-year low in early May, with some temporary improvement since then, but the recent improvement trend has slowed down, with some weekly NPS even declining. As of December 15th, its NPI was -7.2% and NPS was 27.8%, both significantly lower than historical normal levels. In addition, Sensor Tower data shows that although the year-on-year growth of active users in November was 1.6%, the company's app downloads decreased by 13.5% year-on-year. Operationally, Target Corporation has also encountered short-term setbacks. On December 19th, the company's app and website experienced intermittent outages for several hours, affecting the fulfillment and tracking of online orders. Although the issue was completely resolved the next day and affected users were given $20 gift cards, it still had a certain impact on holiday season sales. Additionally, Goldman Sachs Group, Inc. mentioned that aggressive investor Toms Capital has purchased shares of Target Corporation of undisclosed size, adding uncertainty to the company's future development in terms of equity structure changes. It is worth noting that Target Corporation appointed former Chief Operating Officer Michael Fiddelke as the new CEO in August. Goldman Sachs Group, Inc. stated that it will continue to monitor the new management's specific measures in business optimization, investment strategy adjustments, etc. Recently, the company has begun to increase investment in store experience. Through on-site visits to the Westbury and Soho stores, Goldman Sachs Group, Inc. has confirmed relevant investment actions, but these have not yet translated into significant operational improvement in the short term. Goldman Sachs Group, Inc. concluded that although Target Corporation reset its earnings guidance for the 2025 fiscal year when it released its first-quarter financial report in May, signs of improvement in same-store sales trends are needed for a more positive view.