Is Target (TGT) Poised for a Turnaround in 2026?

The question of whether Target Corporation (TGT) can reverse its recent performance and deliver a meaningful rebound in 2026 hinges on a nuanced interplay of options market signals and fundamental catalysts. With the stock trading at $94.97 as of November 2025, analysts project an average price target of $102.62 for 2026, representing an 8.05% upside. This optimism is reflected in the options market, where bullish sentiment has gained traction, even as bearish risks persist. Meanwhile, Target's $5 billion investment plan under new leadership and improving retail fundamentals could serve as the linchpin for a broader turnaround.

Options Market Signals: A Bullish Bias with Caution

The options market has emerged as a key barometer of investor sentiment. Recent data reveals a pronounced bullish tilt, with the open interest (OI) put/call ratio for TGT at 0.8, indicating stronger demand for call options relative to puts. This trend is reinforced by the 30-day put/call ratio (volume) of 0.5958 as of November 18, 2025, underscoring a preference for call options. For the January 16, 2026, expiration, open call interest surged to 60,075 contracts, compared to just 46 for puts, further highlighting the market's appetite for upside potential.

Technical analysts also note bullish reversal patterns and potential breakouts above key resistance levels, aligning with the options data. However, bearish signals cannot be ignored. Earnings downside alerts and pockets of bearish options flow-such as increased short-term put buying-suggest lingering skepticism about near-term execution risks. The put/call ratio's recent 2.3% rise to 0.8 over five days hints at a slight shift toward caution, though it remains below the 1.0 threshold that would signal bearish dominance.

Fundamental Catalysts: A $5 Billion Bet on Revival

Target's strategic pivot under incoming CEO Michael Fiddelke, who assumes the role in February 2026, represents a pivotal catalyst. The company has allocated $5 billion for 2026, including $1 billion in new capital expenditures, to revitalize its store experience, enhance digital capabilities, and expand in-house brands. This investment addresses a critical challenge: a 1.5% year-over-year decline in net sales for Q3 2025, driven by weak merchandise sales and store comps.

Fiddelke's focus on larger-format stores, which have already exceeded sales expectations, underscores a commitment to redefining Target's physical footprint. The CEO also plans to leverage AI for synthetic consumer testing and a ChatGPT-powered app to streamline multi-item purchases according to retail industry reports, signaling a tech-driven approach to customer engagement. Meanwhile, the expansion of in-house brands like Good & Gather and Hearth & Hand aims to differentiate Target's offerings in a competitive retail landscape according to industry analysis.

Digital commerce is another focal point. By 2026, same-day delivery and Drive-Up services will cover over half the U.S. population, addressing a key pain point for time-constrained shoppers. The termination of the Ulta Beauty partnership in August 2026 will also allow Target to broaden its beauty product portfolio according to retail industry reports, potentially capturing market share in a high-margin category.

Balancing Risks and Rewards

While the fundamentals are promising, risks remain. Tariff pressures and a still-fragile consumer spending environment could dampen the impact of Target's initiatives. Additionally, the recent 3.8% decline in store comps highlights the urgency of turning around customer traffic. However, the options market's bullish bias suggests investors are pricing in a degree of confidence in management's ability to execute.

The interplay between options activity and fundamentals is particularly compelling. A put/call ratio below 1 typically signals speculative bullishness, but when paired with tangible corporate action-such as Target's $5 billion investment-it can indicate a more grounded optimism. The market appears to be betting that Fiddelke's store remodels, AI integration, and digital enhancements will resonate with consumers, particularly as the company targets Gen Z and value-conscious families.

Conclusion: A Case for Optimism in 2026

Target's path to a 2026 turnaround is neither guaranteed nor without hurdles, but the alignment of bullish options signals and strategic corporate action creates a compelling case for optimism. The options market's preference for call options, combined with a put/call ratio trending below 1, suggests investors are pricing in a higher probability of upside. Meanwhile, the $5 billion investment plan-focused on store experience, technology, and brand differentiation-addresses core weaknesses while positioning Target to compete in a rapidly evolving retail sector.

As the company prepares for Q1 2026 earnings, the market will be watching closely for early signs of progress. If Target can demonstrate that its investment is translating into stronger sales and customer engagement, the stock could see a meaningful re-rating. For now, the data points to a stock at the cusp of a potential inflection point.