In this segment from MarketFoolery, host Chris Hill is joined by Motley Fool Asset Management's Bill Barker to discuss recent share-price action for retailer Target (NYSE:TGT), which released its fourth-quarter report to an unimpressed market on Tuesday. The numbers were pretty good, but previous information out of management had allowed all the upside to get priced into the stock. The more interesting questions involve where it goes from here, and how it's dealing with the evolution to an omnichannel world.

Bill Barker is an employee of Motley Fool Asset Management, a separate, sister company of The Motley Fool, LLC. The views of Bill Barker and Motley Fool Asset Management are not the views of The Motley Fool, LLC and should not be taken as such.

A full transcript follows the video.

This video was recorded on March 6, 2018.

Chris Hill: Let's start with Target. Fourth-quarter revenue was up 10%. Digital sales up nearly 30% year over year. That's going in the right direction, but just not enough to impress Wall Street today. Shares of Target down a little bit.

Bill Barker: It's a product of where the stock has already been. It's up 30% in the last year, so it's caught up, already incorporated the holiday news earlier on. I think in January they had an investor day and revealed a lot of what the numbers were through that point in time. So, this isn't a whole lot more.

But, the guidance going forward is a little bit tepid. It's a very difficult time for virtually all retailers. Now, Target did announce that its digital sales were up 29%, digital channel sales. That was pretty good. It was 34% the year before. Not bad. That's a small part of the operation. A lot like Walmart; the digital is growing very quickly in comparison to the established business.

Hill: In the same way that Best Buy just went through a really rough stretch to the point where it was perfectly reasonable to question how much longer Best Buy was going to last, shortly after Best Buy got a new CEO, Target got a new CEO. Brian Cornell is now in his fourth year as CEO. And again, the digital sales are not quite as high as, probably, investors would like them to be, certainly shareholders would like them to be. But they're going in the right direction. And I think in general, the report card for Brian Cornell looks pretty good. He had a phenomenal first year as CEO. There was a little bit of a sophomore slump. But, in general, I think you have to feel pretty good if you're a Target shareholder, about his leadership and his team and where this retailer is headed.

Barker: Yeah. You have two different and very tough wars, the digital war and the in-store war. And they're both tough these days. They're coming from behind against Amazon, obviously, and many other competitors out there, where their competitive advantages online, I wouldn't be able to tell you. I do see some competitive advantage in their stores.

But, the store world is not where you want to have the majority of your assets, and that is where they have the majority of their assets. And they can outperform the competition and still be fighting the headwinds that are applicable to everybody. Now, they're not as tied to the problems with malls, necessarily. But they're still in a struggle to make the stores relevant all the time in the world where the stores are less and less relevant.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Bill Barker has no position in any of the stocks mentioned. Chris Hill owns shares of AMZN. The Motley Fool owns shares of and recommends AMZN. The Motley Fool has a disclosure policy.