Wall Street is eyeing Target Corporation (NYSE: TGT) as a turnaround play, with activist hedge fund Toms Capital Investment Management building a stake in the retail giant. The stock price fell 28% in 2025 due to consumer spending shifts, but with a P/E ratio of 12x-13x and a 4.6%-5.0% dividend yield, Target appears undervalued and offers potential for growth.

Toms Capital’s involvement signals proactive efforts to boost shareholder value, with potential demands for strategic changes, cost-cutting, and portfolio reviews at Target. The firm’s track record in driving corporate events and payouts to shareholders creates excitement about the possibilities for Target’s future performance.

New CEO Michael Fiddelke’s appointment coincides with Toms Capital’s stake, presenting a unique opportunity for Target. Fiddelke’s operational expertise combined with the activist investor’s external pressure could accelerate necessary changes and drive stock price growth. This dynamic creates a powerful catalyst for recovery in 2026.

While risks remain, including consumer spending trends and macroeconomic threats, Target’s low valuation, strong dividend yield, and activist investor involvement offer a compelling investment opportunity. With the potential for operational improvements and strategic changes under new leadership, Target stands to benefit from the catalyst for growth provided by Toms Capital’s stake.

Read more at Nasdaq: Bullseye Bounce: Toms Capital Takes a Stake in Target