Fund Manager Explains Why She’s Buying Target (TGT) Despite Struggles, Sees ‘Hints of Improvement’ (2025)

Fahad Saleem

Mon, Apr 21, 2025, 2:51 PM 4 min read

We recently published a list of 10 Stocks in Wall Street’s Watchlist. In this article, we are going to take a look at where Target Corp (NYSE:TGT) stands against other stocks in Wall Street’s watchlist.

Dan Niles, Niles Investment Management founder, in a latest program on CNBC reiterated his concerns about a slowdown in AI spending and said that major technology companies were already facing the impact of a downbeat trend in the industry before the tariff wars started:

“When the MAG 7 reported the December quarter or calendar Q4, six of the seven had their March revenue estimates already cut. So think about that for a second. But the thing is, when the Fed’s cutting like it was last year, nobody cares, right? If the stocks are going up, the charts look good. Why worry about fundamentals or valuations?,” Niles said. “Because the stocks are going higher. So looking forward, I expect all the estimates to come down yet again for the June quarter. When these companies report the March quarter, they were already having troubles when they reported the December quarter before all this tariff stuff kicked in.”

Niles said that companies were buying more ahead of the China tariffs because they expected that duties were coming from the US.

“You can just see that from the China export data already, where for China as a whole, in the month of March, exports were up 12.4%. People were expecting 4.6%. So that’s a massive beat there. And so you can already tell demand’s being pulled forward. So my thought was there was a payback period coming anyway.”

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Target Corp (NYSE:TGT)

Number of Hedge Fund Investors: 49

Stephanie Link, Hightower Advisors CIO, explained in a latest program on CNBC why she’s buying Target Corp (NYSE:TGT) shares despite the stock declines and retail industry struggles.

“This is a turnaround story, but I think you’re seeing hints of improvement. The stock is down 24% since February. It’s trading at 12 times earnings, and they just gave earnings guidance for the full year, which I thought was actually better than expected. It yields 4%. This has never been a traffic problem. Traffic in the past quarter and several prior quarters has been around the 2% level. They just haven’t had the right product mix, with more discretionary versus consumables. But last quarter, you actually saw an improvement in discretionary, and their same-store sales beat expectations by 1.5%.