target folder has been created within my model folder
It would help to know more details about this. Would you be able to share a screenshot of the relevant parts of your file tree, showing where the target folder is created?
Did you intend for your target folder to be where it is? If not, you could delete it and recreate a target folder in th standard location using a dbt compile command.
Finally, if you review your full error message (not only the “dbt found two models with the name” part, but the specification of the relevant model name) I believe that might point you in the right direction.
This similar question might also help: Compilation Error dbt found two models with the name