Bernstein analysts upgraded Target's rating to market-perform from underperform, citing expected U.S. tax refunds and Federal Reserve rate cuts as catalysts for consumer spending. The firm's analysts, including Zhihan Ma and Jeremy Mills, noted that Target's risk-reward skew has become more balanced given anticipated macro tailwinds.

Target faces high execution risk after recent struggles with merchandising strategy and store operations. The retailer announced initiatives including a staggered reinvention of its home assortment, faster apparel speed-to-market, and a $1 billion operational investment funded by cost savings. Analysts acknowledged Target's challenges but suggested this year offers the best opportunity for a turnaround.

Target's upbeat 2026 guidance projects net sales growth in every quarter, with earnings per share between $7.50 and $8.50 exceeding analyst estimates. The company expects full-year net sales to expand around 2%, driven by new stores and non-merchandise sales. CEO Michael Fiddelke reported a healthy sales increase in February, marking progress toward reversing recent performance declines.