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Trader: Target's pullback is a great buying opportunity

Key Points
  • Target fell nearly 6% on Wednesday after missing Q1 earnings and revenue estimates.
  • Investitute.com co-founder and "Halftime Report" trader Pete Najarian used the pullback as a buying opportunity.
  • Najarian likes that the company is showing growth in both online and store traffic, and he believes it's well positioned for the long-term.

Target may have missed the mark on its latest earnings report, but Investitute.com co-founder and "Halftime Report" trader Pete Najarian remains bullish on the stock for the long-term. He used the pullback on Wednesday as an opportunity to increase his position in the stock.

On Wednesday before the bell the Minneapolis-based retailer reported first quarter results that missed analyst estimates for both EPS and revenue. The company cited poor spring weather as having a meaningful impact on its bottom line.

But Najarian believes that focusing on just the top and bottom line numbers is missing the point, since the retailer showed growth in other key areas -- especially online.

VIDEO0:3600:36
Najarian: I bought more Target on the dip

"The earnings actually grew 9% year-over-year so they've got growth there, they've got growth in digital...they've got growth everywhere, and traffic numbers are at historic levels," he said.

Digital sales as well as foot traffic were bright spots for Target during its first quarter. E-commerce sales grew 28%, which was up from 21% during the same quarter a year ago. The total number of shoppers at the store rose 3.7%, representing the strongest performance in more than a decade.

And Najarian believes the meaningful growth in these areas is indicative of a larger trend -- he believes the growth shows that the company's initiatives, such as remodeling its storefronts, are paying off.

"I think they're doing all the right things. They're putting money where they need to. They're actually expanding what they're doing and it's going at a very fast, rapid pace right now. Because of that I think this is a great opportunity to buy," he said.

Target shares are up 9.2% this year, and the stock currently trades at 13.37X forward earnings.

Disclosure: Pete Najarian owns Target.