So you're waiting for Target Corp. (TGT) to bounce back? You might want to get comfortable. The retailer's stock took a step back Friday after Bank of America decided it was time to weigh in again, and the message wasn't exactly a pep talk.

BofA Securities reinstated coverage with an Underperform rating and a $103 price forecast. That implies roughly 10% downside from Thursday's closing price of $114.79. Analyst Christopher Nardone arrived at that number by valuing the stock at 14 times his 2026 earnings per share forecast of $7.35—which, by the way, is about 4% below the current Wall Street consensus. His basic argument is that the stock's valuation already assumes a recovery that the business hasn't yet proven it can deliver.

The Core of the Problem: Apparel and Home

If you want to understand why Nardone is skeptical, look at what's in the shopping cart. His bearish thesis hinges on Target's apparel and home segments, which together make up about 30% of sales. He calls this area "the biggest key to a potential turnaround."

The problem is the competition. On one side, you have off-price rivals like TJX Companies Inc. (TJX), Ross Stores Inc. (ROST), and Burlington Stores Inc. (BURL) winning on assortment—they've got the trendy stuff people want. On the other side, you have Walmart Inc. (WMT) winning on price. That leaves Target in a bit of a squeeze play in these discretionary categories.

Why the Recovery Won't Be a Sprint

Turning this around isn't going to be quick or cheap. BofA points to a planned step-up in capital expenditures, with Target expected to boost its capex by $1 billion in 2026, bringing the total to $5 billion. That's a lot of money going out the door for store remodels, supply chain upgrades, and tech investments before it necessarily brings any new sales in the door.

Add in the usual pressures from inflation, plus rising costs for things like labor and healthcare in the general and administrative bucket, and the path to higher earnings per share gets longer. Nardone's base-case model is pretty sobering: he's assuming flat sales, comparable sales declining by 1%, and only a modest 30 basis points of gross margin expansion. In short, the EPS recovery "will take time."

The Bull Case: Your Tax Refund

It's not all doom and gloom, and the analyst is upfront about the biggest hole in his bearish argument. It might be sitting in your bank account soon. Nardone acknowledges that tax refunds—projected to rise more than 25% this year—could give a near-term jolt to discretionary spending. He calls this potential boost "the biggest risk to our more cautious call."

Investors also seem to be giving the new CEO, Michael Fiddelke, the benefit of the doubt. Early moves under his leadership have raised hopes for more momentum, which could drive valuation higher even before the financial results show up in the earnings reports.

For now, the market is leaning toward the cautious side. Target shares were down 1.52% at $113.04 on Friday following the analyst's call. The message from Wall Street is clear: if you're betting on Target's comeback, you're betting on a marathon, not a sprint.