Barclays Spots Buying Opportunity In Target Stock

TGT shares gapped lower last week on Amazon's one-day shipping announcement

by Josh Selway

Published on Apr 29, 2019 at 10:08 AM

Target Corporation (NYSE:TGT) is on the rise this morning after Barclays upgraded the stock to "overweight" from "equal weight." The brokerage firm also boosted its price target by $30 to $115, expecting the retailer to take market share from what it called a "weaker subset" of rivals. The note called last week's pullback in TGT shares, sparked by Amazon's one-day shipping announcement, a buying opportunity.

The equity has gained 2.3% this morning to trade at $78.81. The move back above the $78 price point is particularly notable since this level was the site of a giant bear gap in November. Taking a contrarian view, it's a bullish sentiment setup for TGT, since most analysts have "hold" or worse recommendations, and short interest has been declining, down 10% in the last two reporting periods. In other words, more upgrades and/or short-covering could be bullish catalysts for Target stock.

CVS Health Corp (NYSE:CVS), meanwhile, received bearish analyst attention, with Credit Suisse beginning coverage with a $61 price target and "neutral" rating. A number of analysts have set low price targets on CVS in light of the stock's dismal performance so far in 2019. Looking at the charts, the shares of the pharmacy chain are holding near 52-week lows, last quoted at $53.47. They're down more than 18% year-to-date.

The company is scheduled to report earnings before the open this Thursday, May 2, but that may not be a reason to feel hopeful. CVS stock has moved lower after earnings in six of the past eight quarters, including an 8.1% decline last quarter.

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