Target should be a key part of investors' portfolios as the U.S. economy enters an uncertain period, according to Barclays. Analyst Karen Short named Target a top pick in the retail space, saying that the stock was undervalued given its fundamental strength. "We are confident investors are being presented an attractive opportunity to own a best-in-class retailer at a sizable discount to other best-in-class peers," Short wrote. Target offers both a mix of household staples and products that fit more in consumer discretionary, which could take a hit during an economic slowdown. The combination of high inflation and an increasingly aggressive Federal Reserve has many on Wall Street worried about lower growth or even a recession in the coming years. However, a Barclays survey of consumers suggested that Target's foot traffic is largely driven by those staples items, which should help keep sales flowing. According to the survey, "~45% of customers buy more than originally planned when visiting a TGT store. So footsteps matter, and TGT has clearly gained footstep/mindshare/market share during the pandemic and this will prove to be sticky in our view," Short wrote. Barclays maintained its overweight rating and $280 per share price objective for the stock. That price objective is more than 29% above where the stock closed on Wednesday. Shares of Target, which are down about 4% year to date, were up more than 2% on Thursday morning. -CNBC's Michael Bloom contributed to this report.
Shoppers exit a Target store during Black Friday sales in Brooklyn, New York, November 26, 2021.
Brendan McDermid | Reuters
Target should be a key part of investors' portfolios as the U.S. economy enters an un