The Grinch Seeks to Ruin Christmas for 40 Million Target (TGT) Shoppers and the Company
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Price: $165.34 -0.7%
Rating Summary:
25 Buy, 19 Hold, 1 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Rating Summary:
25 Buy, 19 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
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Target (NYSE: TGT) customers were shocked to find out Thursday that approximately 40 million credit and debit card accounts may have been compromised due to a major security breach during the busy holiday shopping season.
In a statement today, Target confirmed that cards used at their stores between Nov. 27 and Dec. 15, 2013 may have been impacted. Cards used only online were not affected. Hacking of the system used for 40,000 credit card readers used at the stores appear to blame. Target said the issue has now been resolved and they are working with law enforcement to bring those responsible to justice. The company is partnering with a leading third-party forensics firm to conduct a thorough investigation of the incident. The company did not disclose if Target REDcard customers, which links to customers' bank accounts, were affected.
While the Internet and press are lit up with reports of the serious breach, analysts don't see a major consumer backlash.
MKM Partners analyst Patrick McKeever said the breach is smaller then the one that affected TJX (NYSE: TXJ) in 2003-2006, when more than 90 million card numbers were impacted. "While there was initially great concern about a consumer backlash, the news did not appear to have much impact on TJX's sales or customer perception," he said. "In fact, TJX's same-store sales accelerated from 2% in 1Q07 to 5% in 2Q07, and the stock significantly outperformed the RLX and SPX that year."
While customers will likely be forgiving to Target over the long-term, McKeever said the timing of the matter couldn't be worse - coming just days before the Saturday before Christmas, the biggest day of the year for many retailers.
The extent of the news coverage is likely to be a factor on the near-term impact of the breech on sales, the analyst said. "It will certainly be a major story today -- currently top story on cnn.com and usatoday.com -- but could fade if no new news develops over the next few days," the analyst comments. "That said, we do think there could be some negative impact to 4Q13 sales, and there will very likely be a cost, both in dollars and in management time/attention. We are modeling flat comps at Target U.S. in the fourth quarter, consistent with 11/21/13 guidance, but we were developing an upside bias following management's comments (in a press release issued yesterday) about strong sales this holiday season to-date."
Overall, the analyst remains positive on Target stock. He maintained a Buy rating and $74 price target.
Shares of Target down 2.3% mid-day to $62.11.
In a statement today, Target confirmed that cards used at their stores between Nov. 27 and Dec. 15, 2013 may have been impacted. Cards used only online were not affected. Hacking of the system used for 40,000 credit card readers used at the stores appear to blame. Target said the issue has now been resolved and they are working with law enforcement to bring those responsible to justice. The company is partnering with a leading third-party forensics firm to conduct a thorough investigation of the incident. The company did not disclose if Target REDcard customers, which links to customers' bank accounts, were affected.
While the Internet and press are lit up with reports of the serious breach, analysts don't see a major consumer backlash.
MKM Partners analyst Patrick McKeever said the breach is smaller then the one that affected TJX (NYSE: TXJ) in 2003-2006, when more than 90 million card numbers were impacted. "While there was initially great concern about a consumer backlash, the news did not appear to have much impact on TJX's sales or customer perception," he said. "In fact, TJX's same-store sales accelerated from 2% in 1Q07 to 5% in 2Q07, and the stock significantly outperformed the RLX and SPX that year."
While customers will likely be forgiving to Target over the long-term, McKeever said the timing of the matter couldn't be worse - coming just days before the Saturday before Christmas, the biggest day of the year for many retailers.
The extent of the news coverage is likely to be a factor on the near-term impact of the breech on sales, the analyst said. "It will certainly be a major story today -- currently top story on cnn.com and usatoday.com -- but could fade if no new news develops over the next few days," the analyst comments. "That said, we do think there could be some negative impact to 4Q13 sales, and there will very likely be a cost, both in dollars and in management time/attention. We are modeling flat comps at Target U.S. in the fourth quarter, consistent with 11/21/13 guidance, but we were developing an upside bias following management's comments (in a press release issued yesterday) about strong sales this holiday season to-date."
Overall, the analyst remains positive on Target stock. He maintained a Buy rating and $74 price target.
Shares of Target down 2.3% mid-day to $62.11.
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