Target Corporation (NYSE:TGT) shares gained 2.8% on Wednesday after positive analyst commentary pointed to stronger store traffic, improved merchandising and new in-store retail concepts.
Oppenheimer analyst Rupesh Parikh encouraged investors to “take advantage of the recent pullback” following a series of store visits across major U.S. markets, including Target’s flagship location in Edina, Minnesota.
According to Parikh, stores featured clean layouts, well-stocked shelves and limited apparel clearance inventory. The analyst also highlighted the debut of Target’s first Threshold “Shop-in-Shop,” describing it as a significant merchandising enhancement for the retailer’s flagship home furnishings brand.
Foot traffic trends also improved during June. Gordon Haskett analyst Chuck Grom said customer visits increased 2.6% year over year during the month, outperforming the retailer’s average growth over the previous six months.
Grom said the stronger traffic was particularly encouraging given that Target is now comparing against the boost in customer visits generated by last year’s major Nintendo Switch launch.
The positive analyst commentary comes as Target continues its leadership transition under new Chief Executive Officer Michael Fiddelke.
As part of its strategy, the retailer plans to replace approximately 600 former Ulta Beauty shop-in-shop locations with its own branded “Target Beauty Studios” ahead of the autumn shopping season.
Oppenheimer maintained its Outperform rating on the stock, citing improving inventory management and the company’s efforts to refresh its stores and strengthen the customer experience.