Target (TGT) is expected to post Q4 results largely in line with expectations, with comparable sales down about 2% to 2.5%, while fiscal 2026 guidance could come in slightly disappointing amid weak traffic, Morgan Stanley said in a Monday note.

Ahead of the results, analysts said Target may be poised to begin a new investment cycle aimed at reigniting growth under incoming Chief Executive Michael Fiddelke, according to the report.

For 2026, Morgan Stanley expects cautious guidance from the retailer and warned margins could fall below consensus forecasts of about 1% comparable-sales growth, 2% revenue growth and a 4.5% operating margin if reinvestment accelerates.

Longer term, the bank said renewed investments similar to Target's 2017 reset could help restore growth and recover lost merchandise margins, though the scale and duration remain uncertain.

The firm maintained its overweight rating on the stock and a $125 price target.

Shares of the company were down 2.2% in recent trading.

Price: 114.15, Change: -2.54, Percent Change: -2.18