Canaccord Genuity Morning Coffee on Target (TGT): Right on Target
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Price: $165.44 +4.54%
Rating Summary:
20 Buy, 27 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
20 Buy, 27 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Canaccord Genuity Morning Coffee on Target (NYSE: TGT): Right on Target.
Wrapping up a series of meetings to introduce John Mulligan as Target’s new CFO to the investment community, the company hosted a sell side meeting Friday. Credit Suisse said the themes were consistency in strategy and expectations for the business going forward. Both outgoing CFO Doug Scovanner and Mr. Mulligan discussed their confidence in being able to achieve $8 of earnings within the next five years. There was a modest amount of additional information on the Canada entry, with the expectations that the initial 100 locations set to open will significantly outperform the average U.S. location on a sales per square foot and absolute volume basis in addition to delivering higher EBIT margins as the company believes certain higher margin categories such as home and apparel are under penetrated in Canada versus the U.S. Finally, the stores in that market set to open in 2014 will be the best of the fleet as they are the ones slated for expansion before opening. Both presenters took pains to emphasize that Target will continue to add traffic driving consumables as they have done for the past ten years. They also spent a considerable amount of time talking about the focus on offering a fully integrated shopping experience in the future. However, as with the fourth quarter’s conference call, the most enthusiasm was reserved for the prospects for harvesting ever higher levels of cash flow, particularly as Canadian investments begin to ebb in 2014. Last year’s stagnant stock price performance allowed the company to buy back 1% more shares than originally expected. Credit Suisse believes the company seems ready to take advantage of these types of opportunities in the future, but overall, it is very much focused on top line growth while trying to keep flattish EBIT margins.
Wrapping up a series of meetings to introduce John Mulligan as Target’s new CFO to the investment community, the company hosted a sell side meeting Friday. Credit Suisse said the themes were consistency in strategy and expectations for the business going forward. Both outgoing CFO Doug Scovanner and Mr. Mulligan discussed their confidence in being able to achieve $8 of earnings within the next five years. There was a modest amount of additional information on the Canada entry, with the expectations that the initial 100 locations set to open will significantly outperform the average U.S. location on a sales per square foot and absolute volume basis in addition to delivering higher EBIT margins as the company believes certain higher margin categories such as home and apparel are under penetrated in Canada versus the U.S. Finally, the stores in that market set to open in 2014 will be the best of the fleet as they are the ones slated for expansion before opening. Both presenters took pains to emphasize that Target will continue to add traffic driving consumables as they have done for the past ten years. They also spent a considerable amount of time talking about the focus on offering a fully integrated shopping experience in the future. However, as with the fourth quarter’s conference call, the most enthusiasm was reserved for the prospects for harvesting ever higher levels of cash flow, particularly as Canadian investments begin to ebb in 2014. Last year’s stagnant stock price performance allowed the company to buy back 1% more shares than originally expected. Credit Suisse believes the company seems ready to take advantage of these types of opportunities in the future, but overall, it is very much focused on top line growth while trying to keep flattish EBIT margins.
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