The firm reiterated its "outperform" rating and reduced the price target to $69 from $70 for the American general merchandise store company.
BMO Capital cut annual EPS estimates to $3.16 from $3.17 for fiscal 2014, and to $3.85 from $3.87 for fiscal 2015.
The firm also lowered annual cash flow per share (CFPS) estimates to $2.55 from $2.56 for fiscal 2014, and to $3.35 from $3.37 for fiscal 2015.
BMO said it made these reductions because industry trends point toward lower sales.
"Many of the challenges at Target have been self-inflicted and the changes that are needed to improve the company's disappointing results in the U.S. and Canada are straightforward and correctable over the next 12-24 months," said BMO Analyst Wayne Hood.
Shares of Target are down 0.36% to $61.37 in early market trading on Tuesday.
Separately, TheStreet Ratings team rates TARGET CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate TARGET CORP (TGT) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 8.4%. Since the same quarter one year prior, revenues slightly increased by 1.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.86, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- Net operating cash flow has increased to $994.00 million or 13.08% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -2.70%.
- TARGET CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, TARGET CORP reported lower earnings of $3.07 versus $4.53 in the prior year. This year, the market expects an improvement in earnings ($3.18 versus $3.07).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Multiline Retail industry. The net income has significantly decreased by 61.6% when compared to the same quarter one year ago, falling from $612.00 million to $235.00 million.
- You can view the full analysis from the report here: TGT Ratings Report