Strange problem with running Make

[tiitlan]

I don't know really how to approach this. Make, when ran from command line, works flawlessly. But from inside Atom, I get:
make: *** No rule to make target src/.pas', needed by target/.ppu'. Stop.

I know it does find my Makefile because I can see the correct list of targets.

My Makefile contents:

name = $(notdir $(PWD))
unitfile = $(name).ppu
target = target/$(unitfile)
fpcflags = -FEtarget

.PHONY: build
build: $(target)

$(target): src/$(name).pas
	fpc $(fpcflags) $^

.PHONY: check
check: $(target)
	cd test && make check

My folder structure:

unittesting
    Makefile
    .gitignore
   src/
      unittesting.pas
   target/
   test/

I'm on MacOS 11.4.