Target's (TGT) plan to boost capital expenditures is a positive, but it needs to make substantial investments in pricing strategies and operating expenses to drive a real turnaround, Truist Securities said in a Wednesday note.

The company's Q3 sales were soft as expected, but modestly better than Truist projections that were near the lowest Street estimates, Truist analysts said. Even with a 2.4% growth in its e-commerce business, Target posted same-store sales declines of 3.8%, the analysts said.

Target needs to make significant improvements in its operations to drive revenue acceleration, according to the note.

The company plans to boost capital expenditures by about 25% to $5 billion in 2026, investing more in renovating existing stores, opening new locations, technology upgrades, and other areas, the analysts said. However, they said that in order to turn the business around, Target needs to "rip off the band-aid" and fully commit to a significant reset and start a new investment cycle similar to what it did in 2017.

Truist maintained the company's stock rating at hold and adjusted the price target to $90 from $83.

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