Target Stock at $165: Here's Why Investors Should Pause.
2026-09-06 09:20
•Neil Patel •The Motley Fool
•••• • Axe Cap view
Target Stock at $165: Time to Hit Pause
After a strong rally driven more by fancy valuations than profits, Target’s shares look pricey and risky now.
Target's stock price has jumped nearly 80% in a year, largely thanks to CEO Michael Fidelke’s turnaround efforts—better merchandising and digital moves are paying off. But here’s the catch: most of the rise isn’t from real profit growth; it’s from investors willing to pay a lot more for each rand of earnings. The price-to-earnings ratio has ballooned by nearly 60%, leaving little cushion if things don’t improve as expected. For South African investors tracking global retail trends, this kind of valuation gap matters. If US retailers stumble or inflation bites again, expect renewed pressure on shares, potentially making the rand weaker against the dollar as risk appetite wanes. Right now, Target feels like a play for momentum chasers, not steady investors. Of course, if Fidelke’s initiatives kick off a true earnings boom, you could be wrong. this is just our opinion and not financial advice
Avoid buying Target at these stretched levels. Instead, watch for a meaningful dip or wait for earnings to catch up before considering exposure via US index funds or related exporters benefiting from USD/ZAR swings.
- Target
- USD/ZAR
- Earnings growth accelerates beyond expectations
- US retail sector stabilizes lifting overall sentiment
6/10
Target stock has surged 79% over the past 12 months to $165 per share, driven by CEO Michael Fidelke's successful turnaround efforts including improved merchandising and digital initiatives. However, the analyst warns that most gains have come from valuation expansion rather than earnings growth, with the P/E ratio rising 59% in the past year. At current levels, the stock lacks a margin of safety for new investors, suggesting the easy gains have already occurred.
Our take is based on reporting first published by The Motley Fool.