Target (NYSE: TGT) is inching higher this morning as investor cheer a Q4 earnings beat and solid guidance for the full year.
Despite a revenue miss, the retail giant reported $2.44 per share of earnings for its fourth quarter, handily beating Street estimates – with CEO Brian Cornell pointing to a “resilient” consumer and a bright February as proof of a turnaround.
Still, Barclays remains deeply sceptical. Reiterating an “underweight” rating on Target stock with a $91 price target in a research note dated Mar 3, the investment firm warned its year-to-date gain is built on shaky ground.
Why Barclays recommends selling Target stock
Barclays favours selling TGT stock into the post-earnings strength primarily because of weakening traffic trends.
For the fourth consecutive quarter, customer traffic across Target’s physical and digital platforms has retreated – signalling continued struggle in keeping shoppers engaged.
Additionally, comparable sales – the gold standard for retail health – tanked 2.5% year-over-year, dragged down by a sobering 3.9% decline at brick-and-mortar locations.
While the average ticket size saw a marginal 0.4% bump, it wasn’t enough to offset a 2.9% decline in total transactions.
Barclays contends that Target is losing its “cheap chic” magnetism, failing to provide a compelling reason for budget-conscious consumers to choose it over more aggressive value names or dominant e-commerce giants.
Why else are TGT shares unattractive in 2026
According to Barclays, Target is also grappling with a brand perception problem that continues to bleed into its financial performance.
Some consumers over the holiday quarter voiced frustrations over “sloppier” store standards and lacklustre merchandise collections that no longer spark the “Tar-zhay” excitement of years past.
Simultaneously, the retail firm is caught in a cultural crossfire; the acknowledgement that its recent rollback of Diversity, Equity, and Inclusion (DEI) initiatives sparked backlash and contributed to market share losses suggests a brand in the midst of an identity crisis.
While these social and operational frictions may only be temporary noise, they make it increasingly difficult for TGT to reclaim the high-income discretionary spend it once dominated.
This makes Target shares even less attractive to own in 2026.
How to play Target Corp after its Q4 earnings
While the market fixated on a rosy full-year outlook, Barclays zeroes in on the immediate hurdles presented by Target’s Q1 outlook.
The company’s project for first-quarter earnings to be “flat to up slightly” missed some analysts’ expectations, indicating the “February bounce” management talked about on the earnings call may not have the legs to sustain through the spring season.
Moreover, the digital segment – once TGT’s primary growth engine – showed signs of exhaustion during the critical holiday window.
By maintaining a price target well below TGT shares’ current price, Barclays is signalling that their forward price-to-earnings (P/E) multiple of about 15x isn’t really a bargain.
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