Target selloff post earnings an overreaction, says Citi

Citi analyst Paul Lejuez says that while higher spending led to a Q1 earnings miss, the key pieces of the Target business “are moving in the right direction.” The firm expects the company’s comps and traffic to inflect positively in Q2 against significantly easier comparisons, helped both from pent-up apparel demand as well as price cuts announced this week. Citi is surprised at the 8% post-earnings stock decline and keeps a Buy rating on Target with a $180 price target. Its view of the business is unchanged and is bullish on the company’s value positioning in the environment. The firm believes Target’s risk/reward is favorable and sees the selloff as an overreaction.