Has Target Stock Become A Different Bet?
Target (TGT) stock trades at 16.1 times earnings, representing a discount to the S&P 500 at 22.7. Yet evaluating that valuation requires a clear understanding of the retailer’s shifting priorities. During the first-quarter call in May 2025, executives talked about navigating an ever-changing tariff landscape. By the latest call in August 2026, tariffs had turned from headwind to windfall, and management spent much of the call on traffic and technology. So how much of that new emphasis do the numbers support?
Image from PixabayTarget Now Highlights Shopper Visits And Technology
During the August 19, 2026 call, executives noted that traffic climbed 3.6% from a year earlier. Management characterized this increase in shopper visits as another strong quarter of traffic growth. The company also said it is accelerating its tech capabilities. Executives said Target was one of a small number of retailers to partner early with OpenAI, Google Gemini and other platforms to shape the future of agentic commerce.
In May 2025, executives emphasized tariffs, saying an exceptionally challenging environment had affected Target’s performance. Three months later, during the second-quarter call in August 2025, the company said tariff costs would put short-term pressure on that year’s results. Fast forward to the August 2026 call, and the CEO didn’t mention tariffs at all. When they came up, from the CFO, it was as a windfall: $994 million in refunds that he asked investors to strip out when judging results. In about 15 months, management moved from explaining a hard environment to talking up growth.
Are Target’s Sales And Profit Growing Again?
Target’s sales are growing again. Revenue in the second quarter that ended August 1, 2026, rose 5.3% from a year earlier. For comparison, revenue fell 0.9% in the same quarter of 2025.
Profit expanded at a faster pace than sales. Operating income nearly doubled, but $994 million of that came from one-time tariff refunds. Excluding them, operating income rose about 19%. Target’s operating margin was 9.6%, up from 5.2%, but tariff refunds added 3.7 percentage points. Excluding them, the margin was about 5.9%.
Has Target Earned Its Upbeat Tone?
On sales, yes. On profit, only partly. Target’s results have improved alongside management’s shifting tone. Revenue grew 6.7% in the quarter to May 2026, following year-over-year declines in each of the three preceding quarters. Growth then slowed to 5.3% in the quarter to August 2026. Still, Target has recorded two straight quarters of sales growth, and the company raised its full-year outlook after releasing the August report.
The profit gain is smaller than the headline suggests. Target posted an operating margin of 4.5% in the quarter to May 2026, and excluding refunds its second-quarter margin was about 5.9%, a real but modest improvement.
Tariffs remain worth monitoring. They cut both ways for Target, and second-quarter profit leaned heavily on one-time refunds. During the 2025 tariff shock, Target stock fell 32% from peak to trough, versus 19% for the S&P 500.
For now, sales results back up management’s new emphasis; the profit story will need a quarter without refunds to confirm. Traffic growth will be the key metric to watch in Target’s next report, expected on or around November 18, 2026.
How To Act On TGT?
Now you know TGT better. And that’s our purpose: to make you informed before you invest your money. However, making a bet on a single stock carries its own risks.
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