Bank of America flags Target risk factors for 2027 as cost pressures and slower sales growth loom

Target Corp is facing a tougher set of assumptions for 2027, at least according to Bank of America, which reiterated its cautious stance toward the retailer while nudging its price objective higher. The call, reported by Proactive Investors and carried on Yahoo Finance, points to two linked risks: sales growth that may slow and cost pressures that do not quickly fade.

Bank of America’s updated view centers on the idea that the operating backdrop for Target could remain more challenging than investors may prefer. In that framing, even if the company continues to execute on day-to-day priorities, the combination of slower top-line momentum and elevated costs could limit upside in 2027 earnings.

The bank’s decision to raise its price objective slightly suggests it is not abandoning the stock entirely. Instead, it appears to be balancing a small positive adjustment against a more fundamental concern about the durability of sales growth and the trajectory of costs into the next calendar year.

The warning matters because Target, like other large U.S. retailers, operates with tight sensitivity to demand trends, inventory dynamics, labor and logistics costs, and pricing conditions. When sales growth softens, retailers often find it harder to absorb overhead and fixed costs without either margin concessions or intensified promotional activity.

Proactive Investors’ report does not provide granular details such as the specific magnitude of the price-objective change, the bank’s precise forecast revisions, or any new Target management guidance. It also does not cite a particular line item for the cost pressure, such as wage inflation, transportation, shrink, or store-level expenses, leaving the underlying drivers broadly described as “rising cost pressures.”