Target plans $5 billion capex for stores and tech in 2026

Target Corporation announced it expects capital expenditures of approximately $5 billion in fiscal 2026. The retailer is directing funds toward new stores, full-store remodels, supply chain infrastructure, and technology upgrades. During the first half of the year, Target deployed about $2.4 billion in capital expenditures, representing an increase of nearly 30% compared with the same period a year ago.

Physical stores remain central to the strategy, handling more than 95% of Target's sales. The company opened 17 new stores in the second quarter, bringing its first-half additions to 24. Target also had more than 100 full-store remodels underway, targeting roughly 130 completions for the full year. These locations directly support fulfillment operations alongside in-person shopping.

On the digital side, Target partnered with OpenAI, Google Gemini, and other platforms to explore agentic commerce. Management reported that digital traffic from external artificial intelligence platforms grew more than 3.5 times the industry rate compared to last year. In operations, Target is deploying Proxima, a digital twin of its middle-mile inventory positioning system to model inventory flows before rollout. The retailer fulfilled nearly 30% more same-day and next-day units in the second quarter than a year earlier.

Target shares have risen 23.7% over the past three months, outperforming the retail industry's 2.4% decline. The stock trades at a forward 12-month price-to-earnings ratio of 15.99, compared with the industry average of 27.16 and its own 12-month median of 14.87. Consensus estimates project current fiscal-year sales growth of 5.1% and earnings per share growth of 37.8%, followed by a 3.1% sales increase and a 9.5% drop in earnings per share next fiscal year.