11:47 AM EDT, 05/20/2025 (MT Newswires) -- Target ( TGT ) is expected to post fiscal Q1 earnings exceeding Wall Street estimates, driven by margin recovery and growth in digital and merchandising initiatives, BofA Securities said Tuesday in a report.

BofA forecasts adjusted earnings of $1.78 a share and a 1% decline in same-store sales, both ahead of consensus estimates. Target ( TGT ) reports results on Wednesday.

Target's ( TGT ) merchandising efforts include expanded wellness product lines, brand collaborations with Walt Disney's (DIS) Marvel and Authentic Brands Group's Champion sportwear, and the launch of Warby Parker in-store shops in late 2025, BofA said.

The company is expanding its invite-only Target+ digital marketplace, which grew 35% to $1 billion in gross merchandise value in 2024 from a year earlier is expected to surpass $5 billion in the next five years, BofA said.

About 50% of Target's ( TGT ) imports are at risk from tariffs with 19% coming from China, the report said.

"While an uncertain tariff environment could lead to potential cost, supply chain, and consumer demand disruption," Target ( TGT ) reduced its owned brand production in China to 30% from ~60% in 2017, and that may drop below 25% by the end of the year, BofA said.

BofA reiterated its buy rating for Target ( TGT ) with a $145 price objective.

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