Dividend season may be winding down, but a few heavyweight names are still stepping up with headline-worthy hikes. Retail giant Target (TGT) recently bumped its quarterly dividend by 1.8% to $1.14 per share, marking its 54th consecutive year of dividend growth and cementing its title as a “Dividend Aristocrat” — those elite S&P 500 Index ($SPX) names with more than 25 years of uninterrupted hikes. In a market where even legacy firms are slashing payouts, this kind of consistency signals resilience that investors crave.

But make no mistake, this is not the golden age of retail. Tariffs, margin pressure, and shifting consumer values have complicated the game. Target has been caught in the middle — its DEI moves triggered backlash, its assortment fell out of sync with shopper moods, and its once-shining Ulta (ULTA) partnership hit pause. First-quarter earnings undershot expectations, leaving analysts split on how fast a turnaround can come. Still, the company is recalibrating.

With shares down double digits in 2025 but a fresh dividend hike signaling confidence, could this be the sweet spot for long-term investors to scoop up TGT stock before the next turnaround kicks in?

About Target Stock

Target has come a long way from its brick-and-mortar roots. Once known simply as a big-box chain, it’s now a full-fledged omnichannel force, blending sleek stores with rapid digital fulfillment, thanks in part to its Shipt acquisition.

With a market capitalization of $43.8 billion and nearly 2,000 U.S. stores, Target thrives across categories — from essentials to electronics, fashion to toys. Its owned brands, curated partnerships, and upgraded in-store experiences make it a retail standout in both convenience and style.

Shares of Target have stumbled 34% over the past 52 weeks, weighed down by weak earnings, fading foot traffic, tariff uncertainty, and consumer backlash. Although TGT stock has rebounded more than 11% from its April low of $87.35, investors remain cautious, eyeing a turnaround that’s still more promise than proof in a retail landscape demanding speed and precision. 

In terms of valuation, the stock is trading at 12.7 times forward earnings and 0.41 times sales. That's lower than both Target's industry peers and its own five-year average multiples.

A Dividend Legacy That Still Delivers

While markets wobble, Target holds steady, rocking its “Dividend King” crown and paying up like royalty to loyal shareholders. The latest dividend boost extends its streak to over five decades of annual hikes.

The new dividend will be paid on Sept. 1, offering a healthy 4.64% annual yield. That's well above the S&P 500 SPDR’s (SPY) 1.19% and outshines the S&P Retail SPDR’s (XRT) yield of 1.39%, enhancing its appeal to income-focused investors.

Plus, in Q1 alone, Target returned $510 million to shareholders, edging past last year’s $508 million. With a disciplined payout ratio of 54.5%, Target is dependable, having a rare blend of income, history, and sustainability in the retail sector.

Target Reports Mixed Q1 Earnings Results

On May 21, Target reported disappointing Q1 earnings results, missing on both revenue and earnings, sending the stock tumbling 5%. The retail giant continues to grapple with soft consumer demand, pricing pressures, and operational inefficiencies, all of which weighed heavily on its performance and forced a downward revision to its full-year guidance.

Target's adjusted EPS declined 36% year-over-year (YOY) to $1.30, missing estimates by nearly 20%. Total revenue fell 2.8% annually to $23.8 billion, with merchandise sales down 3.1% to $23.4 billion. Comparable sales declined 3.8%, hurt by a 5.7% drop in in-store traffic and a 2.4% decrease in total transactions. Digital sales, however, were a bright spot, rising 4.7%. That was thanks in part to a 36% jump in same-day delivery through Target Circle 360 and successful brand collaborations.

Margins came under pressure, with gross margin narrowing to 28.2%, largely due to heavy markdowns and rising digital fulfillment and supply-chain costs. Adjusted operating margin dropped to 3.7%. Inventory swelled 11% annually as well, a clear sign of sluggish sales and ongoing misalignment between consumer demand and stock planning. 

Despite ending the quarter with $2.9 billion in cash, Target faces mounting pressure. CFO Jim Lee acknowledged the “highly challenging” backdrop, citing prolonged weakness in consumer confidence, uncertainty around tariffs, and fallout from the company’s revised DEI stance. In response, Target unveiled a new Enterprise Acceleration Office focused on agility, innovation, and AI-driven efficiency.

Yet, despite these ambitious efforts, the company trimmed its full-year adjusted EPS forecast to between $7 and $9, down from the previous $8.80 to $9.80 range. Target also estimates a low single-digit sales decline, signaling a prolonged road ahead for recovery.

Analysts tracking Target predict its profit to decline by 15% to $7.51 per share in fiscal 2025, before bouncing back with a 7.5% rebound to $8.07 in 2026.

What Do Analysts Expect for Target Stock?

Target has a consensus “Moderate Buy” rating overall. Out of the 34 analysts offering recommendations for the stock, eight analysts recommend a “Strong Buy,” three analysts advise a “Moderate Buy,” 21 suggest a “Hold” rating, and the remaining two have “Strong Sell” ratings.

Meanwhile, the mean price target of $110.62 suggests upside potential of 12%. The Street-high target of $175 implies the stock could rally as much as 79%. 

Target’s journey has never been smooth. But from the 2008 crash to the pandemic to today’s retail unrest, the company hasn’t flinched where it matters — its cash discipline. While some others cut back, Target has continued returning capital to shareholders. That kind of loyalty does not come without strong fundamentals.

Through decades of disruption, Target’s consistency in rewarding investors is a signal that, even in storms, this ship knows how to sail. For investors, it's a test of patience. Target may be bruised, but its dividend track record suggests the story is far from over.