Why I think Target stock remains the ultimate 'prove me wrong' story

Brian SozziTue, March 3, 2026 at 7:01 PM UTC

0

Prove investors wrong in 2026, Target (TGT). Let's see what you got.

There is a lot of pomp and circumstance surrounding Target today.

At the same time as its fourth quarter earnings release, the retailer is holding its annual investor day in its Minneapolis backyard.

I think the company — now headed by new CEO Michael Fiddelke and a mostly new leadership team following long-tenured CEO Brian Cornell — will hype its store investment plans and why 2025 results will be a low-water mark.

Execs will probably use today's earnings beat and call out positive sales in February to help their bullish pitch to Wall Street and investors.

The fact that Target is holding its annual investor event in Minneapolis is no small surprise. This is a defining moment for a discount retailer that has performed horribly for more than two years. Horribly in terms of marketing low prices to cash-strapped consumers, who have flocked to Walmart (WMT).

Poorly in terms of online execution.

And reinventing the stores to lean in while consumers shift to stocking up on groceries once a week.

Advertisement

It has also failed miserably at keeping its pulse on where US households are culturally.

All that said, I wouldn't take the enticing bait likely on display at Target today.

Target should stay in the penalty box as a prove-it stock. That means until the company starts stacking positive quarters, you just don't buy the stock and continue to favor better-run Walmart or Costco (COST) on pullbacks.

To underscore my point, here's what I didn't like from Target's quarter:

A fourth straight quarter of falling customer transactions (aka traffic).

Comparable sales fell 2.5%. Walmart US saw a comp gain of 4.6%.

Full-year sales guidance for increases is way too optimistic, given the company's challenges and the fresh consumer uncertainty brought on by the war in Iran.

"I love the bar being set low on Target," retail expert Jeff Macke said on Opening Bid.

I get Macke's point. His dad was the CEO of Target years ago — in fact, he helped build the company from the ground floor. But I want to see Target earn your trust, and until then, the numbers will be the numbers.

Follow Brian Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.

Click here for in-depth analysis of the latest stock market news and events moving stock prices

Read the latest financial and business news from Yahoo Finance

Original Article on Source

Source: “AOL Money”