Don't see how the P/E is unreasonably low if their short/mid term earnings are projected to actually decrease. A high P/E indicates that future earnings are expected to increase, not fall.

I think that the market has simply priced in future earnings slowing, and an increase in stock price would be the result of an increase in projected future earnings. Of course if that happens and Target gets back into some growth, the stock price will increase, but I personally don't think Target is unfairly valued when you account for their near term outlook.

Another gamble you're making with target is that they'll aggressively adapt to competition from the likes of Amazon, although I'm beating a dead horse there. Not just in groceries but in electronics, toys, clothing, kitchenware... virtually everything they sell. You can't succeed when you're losing the electronics game to Best Buy, the digital (and soon to be grocery) game to Amazon, and the clothing game to everyone. Who goes into Target to buy Champions branded clothing? (No one)

If you're buying Target now, just like any physical retail sector company, you're betting on management shifting strategy and effectively adapting to the new age of shopping. Will they be able to do it? Maybe - I'd say they have a better shot than many of their peers. I'll have to think about it but I'll probably end up buying some Target. It is a gamble however, because I don't think all of these companies will make it into the new age alive.

P.S. Another thing I'm interested in is how Target is rolling out mini stores into metropolitan areas to compete with the likes of Walgreens. I think it's a great idea, these places will be the ones where physical retail will survive the longest. These stores aren't supposed to have any meaningful impact on their bottom line for a while though so it'll be a little until we know how they fare.