The pullback in Target ‘s stock, and potential near-term catalysts, create an attractive entry point for investors, according to Bank of America. Analyst Robert Ohmes upgraded the retailer to buy from neutral, citing expectations for an improvement in traffic and gross margin upside in a Thursday note to clients. “With the stock trading at just 12x 2yr forward earnings, we believe the risk/reward outlook has improved and see catalysts that could drive upside to our modestly above-consensus EPS estimates as well as P/E multiple expansion,” he wrote. Target shares have bucked 2023’s broader market uptrend, with shares down nearly 27%. The company in August slashed its full-year earnings guidance . Last month, Target said it will close nine stores in major cities due to increased violence and theft . Still, Ohmes adjusted his price target to $135 from $120 a share, reflecting about 24% upside from Wednesday’s close. Shares rose 2% before the bell. Among the potential catalysts for the upgrade, Ohmes cited expectations from improving traffic. Target’s recent promotional week could potentially boost transactions and stretch to the digital side with the launch of its Drive Up Starbucks offering. Traffic should also continue to improve over last year’s levels. TGT YTD mountain Target shares have fallen about 27% in 2023 Elsewhere, a recovery in freight and transportation costs, the return to more profitable transactions like same-day digital, and easing impediments from shrink should also benefit the company’s gross margins, Ohmes said. “We also see potential for TGT’s ticket comps to turn positive given potential for improved sell through on lower inventory levels across the store and fewer promos,” he said. “A recovery in discretionary next year would also favor TGT given its high exposure to Apparel & Home categories.” — CNBC’s Michael Bloom contributed reporting