DailyPlay – Opening Trade (TGT) – July 02, 2025

TGT Bullish Opening Trade Signal

Investment Rationale

Investment Thesis:
Target Corp. (TGT) appears to be at a potential inflection point following a multi-year drawdown, offering an attractive setup for investors seeking value with upside optionality. Despite being down more than 50% from its highs, the stock has recently shown signs of stabilization and regained critical levels, suggesting improving sentiment. In a defensive retail space where peers trade at rich valuations and compressing margins, Target stands out with its attractive earnings multiple, strong dividend yield, and industry-leading profitability. As macro pressures from tariffs and inflation persist, TGT’s lean cost structure and disciplined capital return profile offer an edge in a risk-conscious market.

Technical Analysis:
TGT has broken out above the key $100 psychological level after months of basing, supported by rising short-term moving averages and strengthening volume trends. The price action now shows early trend development, with the stock pressing against the $104 level and attracting momentum buyers. RSI at 64 indicates building upside pressure without entering overbought territory, while the upward-sloping 20-day and 50-day MAs reflect a short-term shift in trend. The setup favors a move toward the $120–130 resistance zone, offering an asymmetric opportunity for early entry before broader confirmation.

Fundamental Analysis:
TGT trades at a substantial discount to its peers despite growth expectations that are in line and net margins that beat more than 75% of its peers.

• Forward PE Ratio: 13.49x vs. Industry Median 18.09x
  
• Expected EPS Growth: 9.22% vs. Industry Median 8.99%
  
• Expected Revenue Growth: 1.15% vs. Industry Median 5.26%
  
• Net Margins: 3.95% vs. Industry Median 2.29%
  

Options Trade:
After the breakout, we are considering Buy to Open 1 TGT Aug 15, 2025 $100 Call @ $723. This long call strategy provides upside exposure with defined risk, controlling 100 shares for just 7% of the stock’s price. The $100 strike is now slightly in-the-money, aligning with the recent technical breakout and capturing further upside toward the $120–130 resistance zone. The maximum risk is the $723 premium paid, while the potential reward exceeds 3:1 if shares approach $130, offering a leveraged way to play a continued recovery in TGT.

TGT – Daily

Trade Details

Strategy Details

Strategy: Long Call

Direction: Bullish Call

Details: Buy to Open 2 TGT Aug 15 $100 Call @ $7.23 Debit per Contract.

Total Risk: This trade has a max risk of $1,446 (2 Contracts x $723) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $723 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to continue higher over the duration of this trade.

1M/6M Trends: Bullish/Neutral

Relative Strength: 2/10

OptionsPlay Score: 85

Stop Loss: @ $3.62 (50% loss of premium)

View TGT Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Tuesday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View TGT Trade