As a Target (TGT +0.66%) shareholder, I feel like I've been wearing the mass-market retailer's signature bullseye logo in recent years. Target stock has lost a third of its value in 2025, cut nearly in half over the past five years.
The stock's slide isn't a pricing error by a checkout scanner. Target's downticks check out. It's losing market share, wrapping up its third consecutive fiscal year of declining same-store sales. It has fumbled merchandising, politics, and protecting shopper security data.
Things don't have to stay that way in 2026. I'm not still a Target investor because I'm a glutton for "cheap chic" punishment. Let's go over some of the things that will be critical for Target to get right if it wants to bounce back in the coming year.
Image source: Getty Images.
1. It keeps wearing the Dividend King crown
One benefit for patient income investors is that Target has continued to raise its quarterly distributions, even as the stock goes the other way. Target is currently yielding a beefy 5%. It has now boosted its payouts for 55 years, landing it in an elite field of companies known as Dividend Kings for coming through with at least 50 years of dividend hikes.
Given Target's growth challenges and corporate-level layoffs, its reign as a Dividend King isn't a lock. Thankfully, analysts expect the retailer to earn more than enough to cover a dividend boost. Stretching the streak to 56 years this year is important. If the stock heads lower, it means the yield will be much higher than 5% by the end of 2026.
NYSE: TGT
Key Data Points
2. The new CEO hits the ground running
Nothing rattles a boardroom more than a downward-sloping stock chart. Target has been a downhill skier over the past few years. Change is coming at the top. Michael Fiddelke will be the chain's new CEO in February.
He's not some savvy outsider. He has been at Target for 22 years, since arriving as a finance intern.
Fiddelke is currently the discount department store's COO. An internal hire for CEO often indicates a company will stay on the same course as before, but that's unlikely to happen here. Target needs to nail a turnaround strategy, and Fiddelke will need to make well-received signature moves out of the gate.
3. Comps turn positive in 2026
Analysts are surprisingly hopeful for the retail stock. They expect a 2% increase in net sales, with a 5% step higher on earnings per share. Wall Street pros have been optimistic before, only to be burned by reality. Target can't fall into that trap again.
Layoffs and other cost-saving moves should help the bottom line, but that's not a long-term solution. Target needs to resonate again with shoppers. After three years of negative comps, it needs to gain ground at the store level in 2026 for investors to believe in Target again.
