Got it. Yes, I can see where the confusion comes from
Target is where the backups will "land" so the repository. In your case, it seems that the VBR server and repository will be the same (you can have multiple backup repositories, install that repository role on another server and so on, but not important right now).
So the target is indeed the backup server in your case. (At least if I am correct and the storage where you will keep your backups is connected to that dedicated backup server)
Hope it is more clear now