Target is far and away the best-performing retail stock of 2019.
After reporting fiscal third-quarter results on Wednesday that crushed Wall Street's expectation, Target shares rose 14.1% to close at $126.43. The stock is up 90% this year, topping even the strong performances of TJXÂ and Walmart, and is this year's sixth-best performing stock in the S&P 500 index.
"We thought the market was already pricing in more of TGT's progress, but today's results (esp. margin expansion) came in well above even the most bullish expectations," Goldman Sachs wrote in a note to investors.
Target also raised its profit outlook for the full year, ahead of the all-important holiday shopping season, while cutting the cost of handling online orders.
"Overall, we believe Target's strategic transformation initiatives—price investment in everyday items, differentiating merchandising with new private brands, remodeling stores, and investing in digital and delivery, including Shipt—are resonating with consumers," Telsey Advisory Group wrote in a note to investors.
Options trader Pete Najarian believes Target's stock will climb even higher, saying on CNBC's "Halftime Report" that he expects more strong revenue from the company's investment in private-label products.
"When you look at what's going on with Target – whether it's in the grocery space or the rest of the store, and there's five different segments to their store in terms of revenue streams – they have private label everywhere and that is something that will be huge for them. That just helps and is something that's going to kick in for Target in the future as well," Najarian said.
– CNBC's Michael Bloom and Lauren Thomas contributed to this report.