The firm raised its second-quarter same-store-sales-growth forecast to 14% from between 5% and 12.5%. That's double consensus estimates of 7% growth for the quarter.
Target's continuing market-share gains in grocery, beauty, and essentials combined with strong apparel/home comparable sales support JPMorgan's bull case.
They also back the firm's view that Target will retain the customer additions it has made during the pandemic, the analysts said.
"Given we expect the trail of tears on the mall to continue (store closings into the new year) and brands coming TGT’s way, the future looks bright as no other national 'mass merchant' has the balance of low-priced, everyday essential items and cheap-chic apparel and home furnishings," J.P. Morgan's note said.
Shares of the Minneapolis retail giant at last check were 1.9% higher at $134.25.
J.P. Morgan's earnings forecast of $1.85 a share is ahead of consensus estimates of $1.52 for the second quarter. The firm also raised its 2021 earnings per share estimate for the company to $7.36 from $6.70.
"TGT is a core long-term holding, given its ability to compete in the new world of omnichannel retailing and its opportunity to gain share over time and deliver relatively consistent financial results," J.P. Morgan said.
The risks to the investment firm's forecast include consumers limiting their spending on wider-margin and discretionary-product categories during times of belt tightening.