Jim Cramer on Target: "It's Just Way Too Cheap If the Company Can Maintain a Sustained Recovery"

Target Corporation (NYSE:TGT) is one of the stocks Jim Cramer discussed. Cramer noted that he is a “believer” in the new management, as he stated:

Yesterday, we got a much better than expected quarter from Target, which had been struggling for years, but it’s now under new management… Overnight, every analyst that covers the company seemed to be raising their price targets, and two different firms upgraded the stock… So, have I become a believer in Target under new management? Honestly, yes, I am a believer. I couldn’t leave her if I tried, at least for now. The new management team will have to deliver on the promises that it made yesterday, and I’ll need to see some same-store sales turn positive, along with continued margin improvement and legitimate earnings growth, before fully buying in.

But it’s tough not to be encouraged by what we heard yesterday. Target was already improving before the management handover, and now the new regime has a bunch of plans to keep that going. The most important thing in my opinion is that the new management team seems to have a very good grasp of what the company’s been doing wrong, and they’re not afraid to admit those mistakes… This is a fresh start here.

The first step, as they say, is acceptance, and Target’s now well beyond that first step, moving on to the point where they’re rectifying the most pressing problems. Again, the proof will be in the pudding. These guys still need to deliver. Better numbers will have to follow this period of better vibes and big plans. But with Target currently selling for still just 15 times its midpoint of its new earnings forecast, while Walmart trades at nearly 44 times and Costco trades at almost 50 times, well, the bottom line is, Target stock, it could still here be considered a steal. It’s just way too cheap if the company can maintain a sustained recovery under new CEO, Michael Fiddelke. And you know what? I think he’s worth betting on.

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Target Corporation (NYSE:TGT) is a retailer that sells clothing, beauty items, groceries, electronics, home goods, and everyday essentials.