Target Annual Forecast At Risk: Retail Investors Positive Ahead Of Q1 Report

Investors have grown cautious of retail businesses in an environment marked by an uncertain tariff policy, high inflation, and unpredictable consumer behavior.

Target Corp's (TGT) annual forecast will be in focus when it reports first-quarter (Q1) results on Wednesday, with analysts flagging high risk that the big box retailer might lower or withdraw it completely.

Investors have grown increasingly cautious around retail businesses, particularly those selling discretionary items like electronics and fashion, in an environment marked by an uncertain tariff policy, high inflation and unpredictable consumer behavior.

Target stock is down 27% this year and is trading around a five-year low.

On Stocktwits, retail sentiment for the company was ‘bullish.’

“I suspect leadership will sandbag or at least temper the next quarter forecast due to tariff unknowns,” a user said.

In March, the company forecast 2025 net sales growth of around 1%, a "modest increase" in margins, and adjusted earnings per share of $9.80. The view did not include the potential impact of tariffs.

In a recent note to investors, UBS said Target may need to reduce or withdraw its full-year outlook to reset expectations and provide greater visibility amid a fluid operating backdrop.

"Target needs to stabilize its market share, define its positioning in the market, demonstrate the sustainability of its profitability, and showcase its ability to harvest suitable returns," UBS said.

Bernstein, which downgraded the stock to 'Underperform' from 'Market Perform,' said poor weather, weak consumer sentiment, and diversity, equity, and inclusion (DEI)-related strikes affected Target's business in the last quarter.

Shortly after Target scaled back its DEI programs in response to a directive from President Donald Trump, consumer backlash erupted in the form of protests and boycotts — resulting in a noticeable decline in foot traffic across its stores for much of Q1.

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