Free Trial

Target Drops to COVID Lows: Buy the Dip or Cut Losses?

Target logo on smartphone

Key Points

  • Target stock has now fallen to levels not seen since the COVID-19 pandemic, making the company a potential buy target for value investors.
  • Wall Street analysts find the risk-to-reward ratio present in the stock today. 
  • Institutional capital has been flying into Target stock to reiterate this favorably bullish setup.
  • Five stocks to consider instead of Target.
Remove Ads

Investors rarely get a chance to pile into some of the United States’ leading names in the economy at discounts. Today’s opportunity comes within the retail sector, as a specific name has gone down to low prices not seen since the onset of the COVID-19 pandemic outbreak, making this opportunity a proverbial no-brainer buying potential moving forward into the rest of the year.

This chance at a fantastic risk-to-reward ratio comes through shares of Target Inc. NYSE: TGT, one of the favorite supermarkets for America’s new generation and other demographics across the nation. While not as institutionalized or entrenched as Walmart Inc. NYSE: WMT or even Costco Wholesale Co. NASDAQ: COST, Target does hold enough of the underlying market to justify investors taking a second look into its story.

Understanding this favorable risk-to-reward ratio setup in shares of Target, some Wall Street participants have been spotted buying the stock ahead of a potential recovery in the coming months. Investors need to understand that the main reason for the discounts today is primarily related to the threat of trade tariffs in the United States, though this might have now been overdone.

Unbelievable Discounts and Upside

Target Stock Forecast Today

12-Month Stock Price Forecast:
$140.24
48.82% Upside
Hold
Based on 31 Analyst Ratings
Current Price$94.24
High Forecast$190.00
Average Forecast$140.24
Low Forecast$108.00
Target Stock Forecast Details

As of today, Target stock has delivered a pretty bearish decline of as much as 20% on a year-to-date basis, bringing the stock to a deeply discounted level of only 58% of its 52-week high. When investors zoom out for a second, they’ll realize that this discount might have already priced in any bad news that could potentially come to Target’s business.

Whether through inflation, consumer spending trends, or even tariff threats, most of these potential outcomes cannot possibly cause the stock to fall any further. This is especially true as the stock is now at the same price as it was during the peak months of COVID-19.

In essence, this would be like saying the world today is under the same threats as it was back in those years, with lockdowns and layoffs coming from left and right. This is fundamentally untrue today, and therefore, it justifies the thought of Target stock being perhaps overly sold.

Remove Ads

Some in the market believe this to be the case, and they were willing to express this view as well. Analysts from Oppenheimer decided to keep their Overweight rating on Target stock as of March 2025, this time also placing a $150 price target on the company.

According to this view, Target stock could rally by as much as 42.3% from its current position. However bullish this view is, there are other obvious benefits to taking a look at (or even buying) Target stock today.

Reasons Institutions Bought Target Stock

Target Dividend Payments

Dividend Yield
4.75%
Annual Dividend
$4.48
Dividend Increase Track Record
54 Years
Annualized 3-Year Dividend Growth
12.00%
Dividend Payout Ratio
50.56%
Next Dividend Payment
Jun. 1
TGT Dividend History

Even if this double-digit upside takes a bit longer to be realized, there is an added bonus to Target stock today. Management has kept the $4.48 per share payout for shareholders to enjoy in the form of dividends, which at today’s low prices would translate into an annualized dividend yield of as much as 4.25%.

This yield alone would be enough to outpace the inflation rates in the United States and cushion any potential volatility that new trade tariff announcements might bring to Target stock. Next to the double upside potential, these benefits might have been enough to justify new buying at some institutions.

Up to $4 billion in institutional capital has floated into Target stock over the past quarter, giving investors another bullish factor to lean on as a vote of confidence in Target’s future. Allocators from UBS Asset Management led the way in this recent buying.

This group decided to boost their holdings in Target stock by as much as 14.4% as of February 2025, bringing their net position to a high of $513.5 million today. On another discounted note, investors can now check where the stock trades relative to other peers in the retail space.

By trading at only 11.3x price-to-earnings (P/E) valuation multiples, Target stock is now sitting at a massive discount from the 24.0x average valuation in the broader retail sector. This allows investors to access one of the safest business models in the defensive areas of the market at over 50% discounts today.

Remembering that, as volatility breaks out in the broader S&P 500 index, capital might find defensive areas like supermarkets (like Target) that trade at such discounts more attractive than anything else the market can offer in the coming months.

Should You Invest $1,000 in Target Right Now?

Before you consider Target, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Target wasn't on the list.

While Target currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

10 Stocks Set to Soar in Spring 2025 Cover

Market volatility creates opportunity. Our analysts have pinpointed 10 stocks perfectly positioned for exceptional growth this spring, even amid economic uncertainty. Don't miss your chance to access this timely research and invest with confidence.

Get This Free Report
Gabriel Osorio-Mazilli
About The Author

Gabriel Osorio-Mazilli

Contributing Author

Value Stocks, Asian Markets, Macro Economics

Like this article? Share it with a colleague.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Costco Wholesale (COST)
4.2399 of 5 stars
$967.08+0.2%0.48%56.79Moderate Buy$1,029.00
Walmart (WMT)
4.8623 of 5 stars
$87.10-3.0%1.08%36.14Moderate Buy$103.17
Target (TGT)
4.9106 of 5 stars
$94.24-10.9%4.75%9.99Hold$140.24
Compare These Stocks  Add These Stocks to My Watchlist 

Remove Ads

Featured Articles and Offers

Recent Videos

Trump Tariffs Tumble the Stock Market—Here’s How to Protect Your Money
Donald Trump Owns These 7 Stocks, Should You?
 5 Stocks to BUY NOW in April 2025

Stock Lists

All Stock Lists

Investing Tools

Calendars and Tools

Search Headlines

Remove Ads