Target Stock Jumps 2.67% Following Jim Cramer's Bullish Commentary
0h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
target-corpjim-cramer
Fazen Markets Editorial Desk
Collective editorial team · methodology
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Target Corporation (TGT) shares advanced sharply on 25 May 2026, following positive on-air commentary from CNBC host Jim Cramer. The stock climbed 2.67% to trade at $125.60, with an intraday range of $125.11 to $127.98 as of 17:17 UTC today. The move reflects growing analyst confidence in the big-box retailer's ongoing turnaround strategy and its recent quarterly earnings beat.
Target's recent performance marks a significant reversal from its challenges throughout 2024 and early 2025. The retailer faced significant inventory glut issues and margin compression amid shifting consumer spending patterns. The last comparable period of sustained strength for the stock was following its pandemic-era earnings report on 18 August 2021, when shares surged over 5% on record digital sales.
The current macro backdrop features moderating inflation and stable interest rates, providing a more favorable environment for consumer discretionary spending. The personal consumption expenditures (PCE) index, the Federal Reserve's preferred inflation gauge, showed a core reading of 2.6% year-over-year in the latest report, its lowest level in over three years. This has eased pressure on household budgets.
The immediate catalyst for the 25 May price movement was Cramer's characterization of Target's execution as "impressive" following its first-quarter earnings report on 21 May. That report showed comparable sales growth turning positive after three consecutive quarters of decline, driven by improved inventory management and stronger traffic trends.
Target's stock performance on 25 May significantly outpaced the broader market. The S&P 500 index was up only 0.4% during the same trading session. Year-to-date, TGT has gained approximately 15%, narrowing the performance gap with sector leader Walmart, which is up 18% over the same period.
The company's market capitalization increased by nearly $2 billion during the day's trading, reaching approximately $58.2 billion. Trading volume was heavy, exceeding the 30-day average by 45%, indicating substantial institutional interest. Target's current dividend yield stands at 2.9%, based on the closing price of $125.60.
A key metric highlighting the turnaround is the improvement in operating margin, which expanded 180 basis points year-over-year to 5.1% in the first quarter. This recovery follows a multi-quarter compression that saw margins fall to a low of 3.7% in the third quarter of 2024. The margin expansion was achieved despite a modest 1.2% increase in total revenue to $25.8 billion.
| Metric | Q1 2025 | Q4 2024 | Change |
|---|---|---|---|
| Comparable Sales | +0.7% | -4.4% | +510 bps |
| Operating Margin | 5.1% | 4.2% | +90 bps |
| Inventory | $12.4B | $13.5B | -8.1% |
The positive sentiment around Target signals a potential rotation into quality names within the beleaguered consumer discretionary sector. Peer retailers like Dollar General (DG) and Macy's (M) saw modest sympathy gains of 0.8% and 0.5%, respectively. Strong performance from a bellwether like TGT often foreshadows analyst upgrades for the entire brick-and-mortar retail cohort.
Consumer staples ETFs also saw inflows, with the Consumer Staples Select Sector SPDR Fund (XLP) rising 0.6%. This suggests investors may be interpreting Target's success as evidence of resilient consumer health, benefiting companies across the consumption spectrum. The rally put pressure on short sellers, who had targeted TGT with a short interest of 3.5% of float.
A key risk to the optimistic narrative is the sustainability of consumer spending. While inflation has moderated, real wage growth remains tepid, and credit card delinquencies are rising. Target's recovery is also highly dependent on maintaining disciplined inventory levels, a challenge during the upcoming back-to-school and holiday seasons if demand forecasts prove inaccurate.
Investors will monitor the next major data point, the monthly retail sales report scheduled for release on 13 June. This will provide a crucial read on whether Target's positive comp sales are part of a broader consumer trend or company-specific. Any significant deviation from expectations could trigger volatility in retail stocks.
Target's next earnings report is expected around 20 August. Key levels to watch for the stock include near-term resistance at the 200-day moving average of $128.50 and support at the 50-day moving average of $122.00. A sustained break above $130 would signal a potential resumption of the longer-term uptrend.
The Federal Reserve's next Federal Open Market Committee (FOMC) meeting on 17 June will be critical. Any hawkish shift in rhetoric regarding interest rates could negatively impact consumer discretionary valuations. Conversely, a dovish tone would likely provide further tailwinds for the sector. For more analysis on retail sector dynamics, see our report on consumer discretionary outlooks.
Target has increased its dividend for over 50 consecutive years, qualifying it as a Dividend Aristocrat. The current yield of 2.9% is attractive in a moderate interest rate environment. The company's improved profitability and cash flow generation, demonstrated by the margin expansion, strengthen its ability to continue this streak. Dividend sustainability metrics, including the payout ratio, have improved alongside earnings.
Academic studies, such as one published in The Journal of Finance in 2024, have quantified a "Cramer Effect," showing that stocks mentioned positively on his show experience an average short-term price increase of 1-3%. This effect is typically most pronounced for mid-to-large-cap consumer brands like Target. The impact often partially reverses over the following week as the initial momentum fades, making the timing of the commentary a relevant factor.
Target's inventory falling to $12.4 billion marks a return to pre-2022 levels and is a critical indicator of operational health. During the inventory crisis of 2022-2023, levels peaked at over $15 billion, leading to deep discounting that crushed margins. The current lean inventory, down 8.1% from the prior quarter, suggests much better demand forecasting and supply chain management, reducing the risk of future profit-eroding clearance events.
Target's rally reflects a credible turnaround story backed by concrete operational improvements and a favorable shift in market sentiment.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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