Analyst Lowers Target Q1 Forecast Amid Spending Slump, Rising Consumer Tariffs

Nabaparna Bhattacharya

Fri, May 16, 2025, 11:31 AM 2 min read

Telsey Advisory Group expert Joseph Feldman reiterated the Outperform standing on Target Corporation (NYSE:TGT), lowering the terms forecast from $145 to $130.

Target volition study its first-quarter net connected Wednesday, May 21. Analyst Feldman lowered first-quarter and full-year 2025 estimates for Target, citing weaker user spending, peculiarly successful discretionary and wide merchandise, on with rising costs tied to promotions, labor, tech investments, and imaginable tariff impacts.

While Placer.ai information showed declining postulation aboriginal successful the 4th with immoderate betterment later, apt from Easter timing and improved weather, Feldman noted that Target’s efforts successful worth offerings, loyalty programs, backstage statement expansion, store upgrades, and marque partnerships (Apple Inc. (NASDAQ: AAPL), Walt Disney Company (NYSE:DIS), Levi Strauss & Co (NYSE:LEVI), Ulta Beauty, Inc. (NASDAQ:ULTA)) could partially offset pressure.

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Feldman present projects full income to autumn 0.9% to $24.3 billion, with comparable income to diminution 1.5%, down from the anterior forecast of 1.0% and beneath the FactSet statement of a 1.2% drop.

Feldman noted that Target sources astir 50% of its outgo of goods sold from wrong the U.S., portion reducing its reliance connected China from astir 60% successful 2017 to astir 30% successful 2024, with plans to bring that beneath 25% by 2026. Although the institution hasn’t quantified the tariff impact, it plans to mitigate risks done sourcing diversification, vendor negotiations, and terms increases portion preserving equilibrium expanse flexibility.

Reflecting softer user demand, a weaker merchandise mix, and added outgo pressures, particularly tariffs, Feldman lowered his 2025 EPS estimation to $8.80 from $9.30 (vs. FactSet’s $8.62) and 2026 EPS to $9.55 from $10.14 (vs. FactSet’s $9.20).

Price Action: TGT shares are trading higher by 1.68% to $98.62 astatine past cheque connected Friday.

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