12:21 PM EST, 11/12/2024 (MT Newswires) -- Target's ( TGT ) long-term risk-reward growth potential remains "favorable" despite possible short-term volatility, UBS said in a note Monday.

The market has been overly focused on Target's ( TGT ) "narrow, short-term" performance, whereas other big retailers are viewed with a multi-year perspective, UBS said.

"Target ( TGT ) needs to reframe the discussion to the longer-term. Putting together a few quarters of steady results can go a long way towards extending that focus," UBS said, adding that it believes "the upcoming quarters can help to turn this focus."

For Q3, UBS expects sales growth to decelerate, citing a "topsy-turvy" consumer backdrop, including factors like severe weather, a port strike and distraction from the presidential elections.

Target ( TGT ) is scheduled to announce Q3 results on Nov. 20.

Additionally, a shorter holiday season and recent price reductions could weigh on Q4 results, and higher tariffs may further impact the retailer, UBS said.

"While these considerations could create some short-term volatility, we continue see TGT having plenty of levers to generate EPS of more than $10.50 in '25. This should be driven by both steady comp growth and margin expansion," UBS said.

UBS has a buy rating on Target's ( TGT ) stock with a $200 price target.

Target ( TGT ) shares were up 1.4% in recent Tuesday trading.

Price: 155.52, Change: +2.23, Percent Change: +1.46