Evercore sees upside for Target, Best Buy on holiday shopping trends

Investing.comDec 19, 2024 12:46 AM

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Investing.com -- Evercore ISI initiated positive tactical calls on Target Corporation (NYSE:TGT) and Best Buy Co Inc (NYSE:BBY) on improved holiday shopping trends and favourable spending intentions in key categories.

The brokerage sees 8-10% upside for Target, giving a price range of $140-$145.

A mid-teen increase in Target’s web traffic in December and strong consumer interest in categories like toys and home accessories are expected to drive results. Lean inventory levels and improved shrink management could support margins into 2025, Evercore added.

Despite weaker spending intent in categories like clothing, Evercore believes negative sentiment following Target’s Q3 results is overly pessimistic. A strong Q4 performance and positive outlook could lift the stock, the note said.

For Best Buy, Evercore anticipates a similar 8-10% upside, targeting $95-$100. The brokerage highlighted improving consumer electronics sales and robust spending intentions, particularly among heavy electronics shoppers. Electronics ranked in the top three spending categories in Evercore’s holiday survey.

However, risks for Best Buy include potential margin pressures from aggressive promotions and persistent tariff concerns, which could weigh on investor sentiment, the note added.

Reviewed byTony

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