Agent For Change? Wall Street Questions Target Veteran Fiddelke's Appointment As CEO Over Doubts About Transformational Changes

Retail investors, however, took a bullish view after the big box retailer's upbeat quarterly report.

Analysts voiced skepticism over Target's choice of a two-decade company veteran as its next chief executive, warning that his appointment signals continuity rather than the sweeping changes the retailer needs to revive growth, particularly as tariff pressures mount.

Is Michael Fiddelke, currently the chief operating officer, really an agent of change, argued DA Davidson, calling the move "catalyst lost." The research firm lowered its price target on the company's stock to $115 from $125, while maintaining its 'Buy' rating.

Fiddelke, 49, will start in February next year and replace CEO Brian Cornel, who will retire. Fiddelke said on the earnings call that returning to growth would be his number one priority.

Truist, which also lowered its price target while maintaining its 'Hold rating, stated that "substantial" investment changes, which Target needs to improve its long-term relevance, seem "less likely to occur under a long-time Target veteran."

Jefferies lowered its price target by $5 and maintained its ‘Buy’ rating. Currently, 23 of the 37 analysts covering Target have a 'Hold' rating, nine rate it 'Buy' or higher, and four rate it 'strong sell,' according to Koyfin data. Their average price target is $102.68, just 4% below the last closing price.

In recent years, Target has struggled to attract consumers and grow sales, losing its edge to discount retailers like Walmart and e-commerce companies. The Target brand had grown by offering fashionable items and slightly trendy everyday goods, which helped it differentiate. Now, even employees say the management is not doing enough to keep that up.

A rebuke of gay Pride merchandise in 2023, as well as some Diversity, Equity, and Inclusion (DEI) policies earlier this year, have hurt sales and angered some investors and workers in recent quarters.

The mood among retail investors, however, improved late Wednesday, especially after Target's upbeat quarterly report. In the second quarter, same-store sales fell less than feared, and overall revenue topped forecasts.

On Stocktwits, the retail sentiment for Target climbed multiple notches higher in the 'extremely bullish' (91/100), with 'extremely high' message volume, as of late Wednesday.

$TGT So we double beat, AND we got rid of that sh**ty DEI retard of a CEO and this goes down 10%?" a user posted. "Well all I can say is thank you to whoever sold me those shares this morning."

Target shares are down 27% year-to-date.

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