Target's returns on invested capital have declined since the firm decided to transition a larger portion of assets to the lower-return food business, PFresh. This initiative is similar to the strategy Wal-Mart WMT implemented (to great success) in the Read more
There is a significant growth opportunity in Canada that could accelerate earnings growth at Target to double-digits once the rollout is complete.
PFresh and REDcard should help to drive store traffic, delivering enough expense leverage to offset the negative impact on gross margins from those initiatives.
Target's sale of its credit card receivables business, which transferred all default risk to a third party, should allow the company to pay off a significant amount of debt, and lower interest expense. Read more
Target's ROICs have declined since the PFresh initiative transitions a larger portion of assets to the lower-return food business.
Economies of scale are no longer an advantage against Wal-Mart and Kroger, the number-one and -two share leaders in food, respectively.
Consensus is overestimating the opportunity in Canada, which is a mature rather than an untapped market. Read more
We believe management is making the right strategic decision to deploy to a much higher degree the inelastic product that is food. In our view, driving consistent comps in general merchandise will be very challenging in what appears to be a sustained Read more
Target is one of the largest retailers in North America, with about 1,800 units. Target's large-format stores offer general merchandise and now a full assortment of food Read more