Target Stock Continues To Disappoint

Although Target’s (NYSE: TGT) stock recently rallied, it remains a horrible long-term investment. The stock is flat over the last year, while the S&P is up 16%. Over the last five years, it has been down 30% against the market’s 77% increase. Over the five years, Walmart (NYSE: WMT) has been up 198%

Despite some optimism, Target reported a rough quarter. Revenue was down 1.5% to $30.5 million. Comparable store sales dropped 2.5%. EPS fell 4.4% to $2.31.

The company issued its “Target Outlines Strategic Plan for a New Chapter of Growth in 2026 and Beyond” program. For some reason, investors think the plan has merit, which is hard to see based on past management, which still controls the company. Of course, the news release has the “AI” buzzword. The people who run that company said the solution, among other things, was “Increasing spend on brand marketing and new technology, including AI.”

In summary, Target will invest an incremental $2 billion in 2026 for capital investment and operating expenses. This, in turn, should “accelerate” growth. The descriptions were just short of vague, even in their details. In sum, the money that will be invested totals $6 billion, according to The Wall Street Journal

Deep down, investors should be concerned that the company’s long-term CEO, Brian C. Cornell, will become Executive Chair. Michael Fiddelke has become Chief Executive Officer. He helped run Target through a period of poor performance as both Chief Operating Officer and Chief Financial Officer.

The most puzzling thing about Target is why the board could have decided to keep Cornell and Fiddelke.

Among the most staggering statistics is that Cornell’s compensation was 753 times that of the median pay of a “Team Member” in 2024. Cornell’s total comp averaged $19 million for 2022, 2023, and 2024. All of that was for a remarkably poor performance.