Target upgraded to Overweight at Wells Fargo on margin inflection

Wells Fargo upgraded Target to Overweight from Equal Weight with a price target of $148, up from $120. The firm views Target’s Q3 update as “a material inflection” and while noting that macro uncertainty is “undeniable,” it argues that margin clarity “shifts the range of earnings outcomes for this beaten up name much higher.” While adding that “we paid the price for waiting,” the firm says that the risk/reward remains favorable with it new base case for EPS at $9.25 in 2024 and $10.50 in 2025.