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Is Target's Management Team Only After The Quick Buck?

We were mixed when we heard the news that Target (TGT) was going to abandon its Canadian operations. We were even more puzzled to hear the justification: that it would take just 6 years to get Target Canada to profitability. Clearly, the executive suite is only after quick wins, and investing for the future has fallen down on the priority chain. Obviously, the stock price popped on its decision to exit Canada, but it would with any announcement of a reduction in opening expenses and reduced capital spending (both measures bolster near-term free cash flow). But will Target investors in 2022 wish they would have stayed the course in Canada? We think so. The board is focused on the near-term, and this may hurt long-term performance. Caveat emptor.

Target's Investment Considerations

Investment Highlights

• Target scores fairly well on our business quality matrix. The firm has put up solid economic… Read More …