Will Target Stock Soar in 2026?

Don't call it a comeback yet, but shares of Target (NYSE: TGT) are up 25% so far this year. There's a bit of optimism surrounding the Minnesota-based retailer after prolonged backlash and declining sales. Is Target actually turning around, and will the stock continue to soar in 2026?

Showing signs of life

Target's fourth quarter 2025 net sales were 1.5% lower than the same period in 2024, and full-year sales were down 1.7%. This report was pretty much in line with company expectations and not really a surprise. Where Target is showing signs of life, though, is in its 2026 projections.

Image source: Getty Images.

The company's 2026 guidance anticipates net sales growth of 2% compared to 2025. It also expects to grow net sales in every quarter of the year. Target is also shooting to increase its operating income margin by 20 basis points and increase adjusted earnings per share by a full dollar. These numbers aren't showstoppers, but they'd be a much-needed boost for Target.

Shakeups in leadership

Target's new CEO, Michael Fiddelke, who took the helm of the company just last month, is already making big moves to right the ship. Fiddelke is replacing at least two longtime executives and outlined a turnaround plan.

The turnaround plan includes improving the retailer's app, stores, and product selection. Specifically, Target doesn't want to be known as an "everything store" anymore, according to the new CEO. Target expects an additional $2 billion in capital expenditures and investments to fulfill its mission this year.

Competitive pressures from Walmart and Amazon

Walmart's (NASDAQ: WMT) focus on groceries and Amazon's (NASDAQ: AMZN) omnichannel dominance are two of the main reasons Target has struggled to keep pace. Additionally, Target faced severe backlash after it cut diversity, equity, and inclusion efforts, which resulted in nationwide boycotts. More recently, ICE raids at Target facilities in Minnesota have drawn additional scrutiny. The company is still looking to recover reputationally.

Target's turnaround strategy will focus on specific categories, including baby care and clothing, as well as groceries, in an effort to further focus on busy families.

Will Target hit its mark?

Target is desperately searching for growth opportunities after immense pressure from investors and several quarters of flat or declining sales. The new executive leadership team needs to prove that it has a different vision and plan that will effectively set Target on a better path. I do believe the mix of insider experience and a solid turnaround plan will prove effective for the beleaguered retailer.

Investments into its differentiator categories and focus on improving overall customer experiences will take time, but it is a great place for the Target turnaround to begin. I anticipate Target's growth this year won't knock investors' socks off, but it will be enough to help the stock soar back to levels it hasn't seen in five or so years.

Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Target, and Walmart. The Motley Fool has a disclosure policy.