Target Stock Soars As New CEO Unveils $2B Turnaround Bet To Make Shopping Joyful Again: Wall Street Stays Cautious

• Fiddelke said the retailer was making an incremental investment of more than $2 billion across the business this year.
• GlobalData’s Neil Saunders said that Target is going in with “a whole slew of initiatives to try and turn the ship,” adding “these are course corrections that are very much needed.”
• The retailer’s stock has gained nearly 25% so far this year and is on track to snap a four-year losing streak.

Shares of Target jumped nearly 7% on Tuesday, marking its best session in nearly a year, after the big-box retailer outlined a turnaround plan under new CEO Michael Fiddelke, who is looking to enhance customer shopping experience and reposition assortments offered in the stores.

“Consumers consistently say they want and expect more, especially from Target … That means getting the basics right. Sharp pricing, strong in-stock, wicked-fast same-day delivery. Our bar is higher. We want to spark an emotional connection, so shopping isn't a chore, it's a joy,” Fiddelke said during a post-earnings call on Tuesday.

The retailer’s stock has gained nearly 25% so far this year and is on track to snap a four-year losing streak, which has priced in Target’s post-pandemic draught and consumer pullback during the higher interest rate period.

Target’s New Plans

“We have a lot of work in front of us. Transforming this category will be a multi-year journey. We know that reclaiming our authority in [the] home starts with clarity and conviction in pursuit of a simple ambition: to offer the most stylish, design-forward home products at accessible prices,” Chief Merchandising Officer Cara Sylvester said.

She noted that Target was going through key areas, category by category, to reinvent areas that have not been touched in years. Sylvester added that by June, the retailer would have overhauled 75% of its decorative accessories assortment, and by the fall, it would have touched more than three-quarters of its top-of-bed assortment and more than 80% of kids' home products. 

“We're also streamlining our own brand portfolio and doubling down on our largest and most powerful home own brand, Threshold,” Sylvester said, noting the need for scaling private brand products. She added that this summer, Target will relaunch Threshold and introduce dedicated shop-in-shop destinations starting in 200 stores. 

She said that beauty has delivered more than a decade of growth for Target and that the company would be introducing Target Beauty Studio in 600 stores.

Target’s $2 Billion Investment

Fiddelke said that the retailer was making an incremental investment of more than $2 billion across the business this year, including an additional $1 billion in capital expenditure to support new stores and remodels, and another $1 billion to elevate the guest experience.

“We're also ramping up our remodel program. We expect to complete more than 130 full-store remodels in 2026. We're expecting a strong return on those new store and remodel investments, just as we've seen in recent years,” CFO Jim Lee said.

“Getting back to a more aggressive pace of remodels brings some of the stores that frankly are due for a little bit of love back up to our current and greatest thinking,” Fiddelke said, adding that the 130-plus full-size remodels that we do this year are a “good step in the right direction.” 

“You know, not a bad rule of thumb is you can expect us to remodel a store every 10-15 years,” he said.

Wall Street Waiting On The Turn Around

“There is no way to sugarcoat it; Target underperformed over the holiday quarter,” said Neil Saunders, Managing Director of GlobalData, adding that Target is struggling to show up for customers consistently and compellingly. “There are too many out of stocks, too little inspiration in ranges, too much muddle and mess in stores.”

He noted that Target is going in with “a whole slew of initiatives to try and turn the ship,” adding “these are course corrections that are very much needed.”

“Can Target turn things around? It won’t be plain sailing, as issues like investment at a time of compressed profit will need to be squared. And customer trust will need to be rebuilt,” Saunders said.

AJ Bell investment director Russ Mould said that Target was a rare riser in the U.S. on evidence that the retail chain’s turnaround programme is beginning to hit the mark. “The company has struggled thanks to fierce competition from the likes of Amazon and Walmart in recent years, as well as rising incidences of theft and pressures on consumer budgets,” Mould noted.  

Mould added that Fiddelke is only a month into his tenure as CEO but is already off to a positive start. “Sustaining the momentum is the challenge still in front of him.”

How Are Stocktwits Users Reacting?

Retail sentiment on Target jumped to ‘extremely bullish’ from ‘neutral’ territory a day ago, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.

A bullish user on Stocktwits said the corner has been turned for Target, and the stock has plenty of room to run on the upside.

In the last 24 hours, retail message volume on Stocktwits for the stock jumped 363%, and over the past year, the ticker saw a 10% spike in followers on the platform.

Shares of Target have gained nearly 4% in the last 12 months.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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