Key Takeaways

• Target will report third-quarter results Wednesday morning as markets look for data on U.S. consumer spending ahead of the holiday shopping season.

• Analysts are bullish on Target stock, with 10 out of 16 tracked by Visible Alpha holding "buy" ratings and all but one having a price target above the stock's current levels.

• Sales and profit are expected to rise narrowly year-over-year as Target has worked to lower prices and win back customers scared off by inflation earlier this year.

Target (TGT) is set to report third-quarter results before the opening bell Wednesday, with analysts expecting narrowly rising revenue and profit as markets look for insight on consumer spending ahead of the holiday season.

Analysts are bullish on Target stock, with 10 "buy" ratings and six "hold" ratings among the 16 analysts tracked by Visible Alpha. The average price target of $179.94 is about 15% above Target's Monday closing price of $156.56, with all but one having a price target above the stock's current levels.

For the third quarter, analysts expect Target to report a revenue bump of nearly 2% to $25.89 billion, up from $25.40 billion the same time last year, according to estimates compiled by Visible Alpha. Profit is seen rising to $1.05 billion, or $2.28 per share, up from $971 million and $2.10 per share.

Target shares, which slipped less than 1% soon after markets opened Tuesday, have gained about 9% so far this year.

Analysts Looking for Results on Value Push

Bank of America analysts wrote in a recent note that even though Target "has not historically benefited from the same value perception as its large broadline peers" like Walmart (WMT) and Costco Wholesale (COST), the retailer's recent focus on value positions it well to gain market share.

Earlier this year, Target announced plans to lower prices on thousands of popular products over the summer, and last month announced its schedule for rolling out daily and weekly deals through the holiday shopping season. With Walmart beating estimates in its earnings report Tuesday, markets will be watching the reports of Target and other retailers reporting this week for indicators about the health of the U.S. consumer ahead of the holidays.

Executives said in earnings calls earlier this year that consumers impacted by inflation had shifted away from discretionary spending, and in some cases away from Target entirely, leading the retailer to lower prices in attempts to win those customers back. Last quarter, Target said discretionary spending trends "continued to improve meaningfully" as categories like apparel and beauty sales grew.