The firm believes that Target is still one of the best plays in the retail sector based on the company's strong second-quarter earnings.
"Yesterday's 20% move was well-deserved in our view. As painful as it is to upgrade a stock after such a move, we want to catch the next 20%, which we
believe will be achieved as the company continues to prove to the market that it is a winner in this retail landscape," said analyst Paul Lejuez.
The firm believes that Target's numerous investments in its digital reach and other upgrades are finally starting to pay off after they "once seemed never-ending."
Citigroup listed 10 things it liked about the stock, including the fact that Target is one of few retailers with positive store level comps, moderating capital expenditures, omni-channel leadership, and private brands that customers seem to like.
The company reported second-quarter adjusted earnings of $1.82 a share on revenue of $18.42 billion, topping analysts' estimates.
The stock rose 1% to $104.03 in trading Thursday.
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