I noticed the auto update option didn't work for the target mobile coupon as well. I just shredded that coupon and went back into the target app and added the current coupon to passbook.
So how do you shred the coupon and get the new one?
Hit the little "i" on the bottom right, when it flips over, hit the trash can icon on the top left. Then go into the target app, go to mobile coupons and add to passbook.