Target's (TGT) broad-based comparable sales growth and raised guidance for the top line, margin, and earnings per share signal further progress in its turnaround efforts, RBC Capital Markets said.

The company's fiscal Q2 comparable sales growth of 3.8% was driven by 3.6% traffic growth, above RBC's 3.0% estimate and consensus of 2.4%, with strength broad-based across months and customer demographics, the brokerage said in a Wednesday research note.

The firm raised its Q3 comparable sales growth estimate to 3.5% from 2.5% and its adjusted EPS estimate to $2.24, or $2.02 excluding tariff refunds, from $1.90 previously.

RBC now models 2026 comparable sales growth and adjusted EPS of 4.1% and $10.77, or $8.89 excluding tariff refunds, compared with 3.4% and $8.68 previously. For 2027, it expects comparable sales growth and adjusted EPS of 2.0% and $9.88, respectively.

Comparable sales momentum is benefiting from easy comparisons, which are slated to become significantly more challenging in 2027, according to the note.

RBC raised its price target on the company's stock to $178 from $166 and reiterated its outperform rating.

Price: 159.34, Change: +0.34, Percent Change: +0.21