Goldman Sachs Says Target Has Been Too Much Of A Moving Target For Customers

According to Goldman Sachs, Target (NYSE: TGT) seems to have swung the image pendulum too severely in recent years, which has left consumers a bit confused.

Goldman Sachs reported that the company has moved from: (1) pre-recession –‘Tarjay' where it pioneered mass with class, (2) recession – bolstering of the ‘Pay Less' side of its ‘Expect More. Pay Less' promise with intensified signage, and (3) recovery –intensified remodeling effort, driving more success across the needs vs. wants part of the store. “These evolutionary swings have caused TGT's comps and correspondingly valuation to lag peers. We believe that as consumers become accustomed to Target's recent changes, we expect a compelling mean reversion opportunity across comps and multiples to benefit investors. Our unchanged $62, 12-month price target is based on 13.7X forward 24-month EPS, which is in line with its three-year average. NTM PE.”

Target closed yesterday at $49.95.