12:09 PM EDT, 08/15/2025 (MT Newswires) -- Target's ( TGT ) comparable sales likely fell less than expected in the fiscal second quarter amid an improving consumer spending environment, Oppenheimer said in a Friday note.

The brokerage is projecting a 2.5% decline in Target's ( TGT ) same-store sales, compared with its previous forecast of a 3% drop and the consensus estimate indicating a 3.2% decrease. The retailer is scheduled to release its quarterly results on Wednesday.

"Recent data points suggest a sequentially improved discretionary backdrop with stronger trends in beauty and consumer confidence moving higher," Oppenheimer analysts, including Rupesh Parikh, wrote. "We also have observed normalized levels of clearance inventory, which further supports our slightly stronger top-line forecasts (versus) a few months ago."

The brokerage, however, anticipates a "material profit decline" for the quarter as signaled by the retailer in May, taking into account weaker revenue, tariff pressures, and inventory adjustment costs.

Parikh increased Target's ( TGT ) earnings-per-share forecast to $1.92 for the second quarter from $1.83 previously, but it would still be down from $2.57 reported for the prior-year quarter. The consensus is for $2.01.

Still, Target ( TGT ) is poised to affirm its full-year guidance, Parikh said.

Oppenheimer revised its 2025 estimates for Target ( TGT ). Comparable sales are now projected to decline 2.5%, compared with its prior forecast of a 2.7% drop. The brokerage increased its EPS estimate to $7.05 from $7. In May, Target ( TGT ) said it expected a low-single-digit decline in sales for fiscal 2025, with adjusted EPS of $7 to $9.

Target's ( TGT ) shares fell 1.7% intraday Friday, taking its year-to-date loss to 24%. Oppenheimer has an outperform rating and a $130 price target on the stock.

"We remain attracted to a discounted valuation and believe shares have bottomed, consistent with our views last print," Parikh said. "For longer-term players, we would take advantage of any dips as volatile trading could continue until comps return to positive territory."

Ulta Beauty ( ULTA ) and Target ( TGT ) said Thursday that they will end their shop-in-shop partnership in August 2026, when the current agreement expires.

Price: 102.33, Change: -1.92, Percent Change: -1.84