TGT · Q2 FY2027 (company-reported Q2 2026)
TARGET CORP Q2 FY2027 (company-reported Q2 2026) earnings analysis
By SageNoodle ResearchBullish
| Metric | Actual | Estimate | Result |
|---|---|---|---|
| Revenue | $26.54B | yr ago: $25.21B | Beat |
| EPS | $4.11 | yr ago: $2.05 | Beat |
| Free Cash Flow | $2.43B | yr ago: $1.01B | Beat |
| Gross Margin | 33.7% | yr ago: 29.0% | Beat |
| Operating Margin | 9.6% | yr ago: 5.2% | Beat |
What changed
Net sales increased 5.3% as comparable traffic rose 3.6%, while digital comparable sales grew 8.7% and non-merchandise sales grew 20.1%. Reported EPS doubled to $4.11, but $1.65 per share came from a tariff refund; excluding that benefit, management said EPS increased 20% and gross margin expanded approximately 100 basis points year over year.
Impact on the investment thesis
There was no prior SageNoodle fair value to revise, so we initiate fair value at $166 per share. The quarter supports a higher normalized earnings base, but the tariff refund is nonrecurring and the current price already discounts much of the operating recovery.