Target (TGT) is an innovator at heart. The big box retailer knows its customers, constantly adding new merchandise with sizzle. In September, surging demand for Missoni’s vibrant, 400-piece fashion line crashed the Target web site. Another addition is its designer label Maternity by Liz Lange.

Oddly, Target stock has underperformed its peers since early this year, sinking 13.1 percent. Same store sales nearly stalled at 2.1 percent last year. Target now is counting on its 1,762 Target stores in 49 states, and some fresh ideas, to regain momentum.

And it’s finally happening. This year, sales are projected to rise 4 percent at the Minneapolis company, according to S&P forecasts. Target is remodeling 384 of its stores with the PFresh format, adding fresh foods to its fashionable merchandise mix.

Second quarter 2011 sales are on the mend. Revenues rose 5.1 percent to $15.9 billion versus $15.1 billion last year. Comparable same-store sales rose 3.9 percent as new stores kicked in revenue. A strong balance sheet and cash flow are fueling more growth. A 2.3 percent dividend payment pays investors to wait.

Higher traffic

Of the 25 analysts followed by Thomson/First Call, five have strong recommendations and 11 have buys, with nine holds.

S&P has a buy rating, citing Target’s accelerating same-store growth and improving health and beauty assortments. Aggressive competitive pricing could dampen sales, though, the ratings agency noted. The company reports next on or about Nov. 16.