Jim Cramer says buy Target on any pullback as turnaround takes hold
Target's Turnaround Gains Momentum, Jim Cramer Says Buy on Pullbacks
Shares of Target surged more than 5% on Wednesday following the retailer's release of better-than-expected fiscal second‑quarter revenue and earnings. The company's turnaround efforts appear to be gaining traction, prompting CNBC's Jim Cramer to recommend buying the stock on any pullbacks.
Earnings Beat Expectations
Target reported a 3.8% increase in comparable sales, a significant turnaround from the 1.9% decline in the same period last year. This marks the company's second consecutive quarter of positive store comps. The sales growth was driven by increased store traffic and growth in its digital channel. Operating margins also saw a substantial improvement, rising 440 basis points to 9.6%, well ahead of the consensus estimate of 5.6%. Additionally, the company mentioned a bottom‑line benefit from tariff refunds and raised its financial guidance for the rest of the fiscal year.
Turnaround Underway
Jim Cramer described Target as “a company that is on the mend,” referring to its deteriorating sales over the past few years. The retailer had struggled to win over shoppers, resulting in lower store traffic, inventory issues, and customer backlash. However, under the leadership of CEO Michael Fiddelke, who was appointed in August 2025, Target has seen renewed momentum. Fiddelke, a 20‑year Target veteran, has held leadership roles across merchandising, finance, operations, and human resources. Cramer praised Fiddelke, saying he has “reenergized the company” and is “a very in‑touch CEO.”
Growth Strategy
Over the past year, Fiddelke has accelerated Target's turnaround by reducing prices on more than 10,000 frequently purchased items. This move was aimed at attracting price‑conscious consumers seeking value. The company has also continued to invest in newness, convenience, and an elevated shopping experience. Fiddelke expressed confidence in the company's strategy, stating that the second‑quarter results “build on the encouraging momentum we saw in Q1, giving us increasing confidence that our strategy is resonating with our guests and strengthening our leadership position in style, design, and value.”
Economic Challenges Ahead
Despite the current economic landscape of stubbornly elevated inflation, which poses a major challenge for Target and other retailers, Fiddelke remains bullish on the company's momentum continuing through the second half of the year. Jim Cramer shares this optimism, recommending that investors buy Target shares on any pullbacks. “Let it come in and buy,” Cramer said on “Squawk on the Street,” referring to Target shares, which have rallied more than 53% this year. “While the stock is up a great deal … we have a winner here.”
Source: CNBC · 2026-08-19