10 Most Undervalued Quality Stocks To Buy According To Analysts

6. Target Corp. (NYSE:TGT)

Average Upside Potential: 17.74%

Forward Price-to-Earnings Ratio: 14.6

Number of Hedge Fund Holders: 52

Target Corp. (NYSE:TGT) operates a chain of discount department stores and hypermarkets and is one of the largest American-owned private employers in the US. It offers products like clothing, electronics, home goods, and groceries, and is known for its convenient store locations, competitive prices, and a focus on providing a positive shopping experience. It also offers online shopping and in-store pickup options for added convenience.

Revenue increased by 2.75% in FQ2 2025, driven by increased traffic. The company earned $2.57 per share in this quarter. Digital sales, particularly same-day services like Target Circle 360 and Drive Up, grew significantly. These services contribute most of digital sales and give the company an advantage. Drive Up sales exceeded $2 billion in Q2 and $4 billion for the year. Clothing sales increased by 3%.

Target Circle gained 2 million new members, reaching 100 million total members. A July promotion added many new cardholders and Target Circle 360 members. Target Corp. (NYSE:TGT) donated $2.5 million to disaster relief efforts, including support for the Red Cross and Team Rubicon after Hurricane Beryl.

Earlier this year, the company integrated GenAI into the handheld devices in its stores, providing its team with rapid access to best practice documentation and the ability to quickly receive straightforward responses to common customer questions. It recently released its 2024 Bullseye’s Top Toys list, featuring over 60 must-have items, many exclusive to Target Corp. (NYSE:TGT).

While the ongoing port strike presents challenges for many retailers, particularly those with a high reliance on imported goods, the potential for increased market share and pricing power for domestically focused businesses presents a bullish opportunity. The potential for price hikes due to the strike could benefit retailers with pricing flexibility and the ability to maintain margins.

Diamond Hill Large Cap Strategy stated the following regarding Target Corporation (NYSE:TGT) in its Q2 2024 investor letter:

“Other bottom contributors in Q2 included CarMax, Target Corporation (NYSE:TGT) and ConocoPhillips. US-based mass retailer Target faces concerns about a slowing consumer discretionary spending environment, which weighed on shares in the quarter.”