Shares of Target Corp (TGT) edged lower in early trading Thursday, even after the company reported upbeat first-quarter results on Monday. The market's muted reaction reflects a cautious outlook from analysts, who see headwinds ahead despite the beat.

Here's what the analysts are saying:

• BofA Securities analyst Christopher Nardone maintained an Underperform rating and $110 price target.
• JPMorgan analyst Christopher Horvers reiterated a Neutral rating and $129 price target.
• BTIG analyst Robert Drbul reaffirmed a Neutral rating.

BofA Securities: Nardone acknowledged that Target's new merchandising initiatives drove some sales traction in Q1, but he cautioned it's too early to tell if that's company-specific or industry-wide. The discretionary segment remains "very competitive," and pricing pressure could persist. Gross margin drivers in Q2 should mirror Q1, including opportunities from full-price sell-through and ongoing benefits from advertising and supply chain efficiencies. Management raised full-year earnings guidance to near the high end of its $7.50-$8.50 per share range, but Nardone noted that the raise only reflects the Q1 beat. "Decelerating sales trends could compress the multiple and limit incremental upside to today's guidance raise," he said.

JPMorgan: Horvers pointed out that Target's earnings outlook builds in margin assumptions that account for weaker sales, rising energy costs, and escalating promotions. He expects earnings in the second half of 2026 to be similar to the second half of 2024. The guidance assumes slower sales trends for the current quarter, he said. While April sales improved sequentially, that was due to an earlier Easter and tax refunds. The outlook assumes "deceleration for the balance of the quarter given slowing tax stimulus, macro uncertainty, and comparisons to the Nintendo Switch in June," Horvers wrote.

BTIG: Drbul noted that total revenue came in at $25.4 billion, up 6.7% year-over-year, "driven by broad-based strength across categories and channels." Adjusted earnings of $1.71 per share beat expectations. Still, he remains cautious: "While encouraged by early momentum, we maintain a cautious outlook given the highly competitive landscape TGT operates in, tougher compares ahead, and a still uncertain consumer backdrop." Target's stock trades at a significant discount to peers, which Drbul said seems "warranted" given softness in traffic and sales trends.

TGT Price Action: Shares of Target had declined by 0.46% to $121.80 at the time of publication Thursday.