Target's Digital Growth Story Gains Strength With Same-Day Delivery

Target Corporation’s TGT digital business continued to gain momentum in the second quarter of fiscal 2026, with same-day delivery emerging as a key driver of online growth. The company reported an 8.7% increase in comparable digital sales during the quarter, supported by more than 25% growth in same-day delivery. This performance highlights the growing role of faster fulfillment options in helping guests complete purchases more conveniently. 

Target has continued to build its digital capabilities by leveraging its store network as a fulfillment advantage. The company noted that its stores serve as fulfillment hubs for more than 95% of sales, helping bring inventory closer to guests and enabling faster, more reliable fulfillment. During the quarter, Target fulfilled nearly 30% more same-day and next-day units than in the prior year, reflecting continued improvements in delivery speed. 

The company’s digital progress also extends beyond delivery speed, with technology investments aimed at improving the overall shopping experience. Target is modernizing its technology foundation to personalize experiences across stores and digital channels while helping teams respond faster to consumer trends. 

As consumers increasingly seek convenient shopping solutions, Target’s same-day delivery growth reflects how the retailer is enhancing its digital ecosystem. By combining online ordering capabilities with store-based fulfillment, the company is strengthening the connection between its physical locations and digital channels while making shopping easier for guests.

How Does Target Stack Up Against Its Industry?

Target, which competes with Dollar General Corporation DG and Costco Wholesale Corporation COST, has seen its shares rally 30.6% over the past three months compared with the industry’s 0.4% growth. While shares of Dollar General have risen 13.8%, those of Costco have fallen 2.3% in the aforementioned period.
 

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What Does Target’s Current Valuation Suggest?

From a valuation standpoint, Target's forward 12-month price-to-earnings ratio stands at 17.15, lower than the industry’s 29.99. However, the stock is trading above its 12-month median level of 14.54.

Target is trading at a discount to Costco (with a forward 12-month P/E ratio of 41.55) but at a premium to Dollar General (16.26). 
 

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What Do Earnings Estimates Signal for Target?

The Zacks Consensus Estimate for Target’s earnings per share for the current and next fiscal year has increased by 81 cents and 9 cents to $10.42 and $9.27, respectively, over the past seven days.
 

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Target currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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