The Hedgeye Retail Team, led by Sector Head Brian McGough, will host a Black Book conference call today (at 11 a.m. ET) to review their SHORT thesis on Target Corporation.
Target has historically been largely a macro call, as has Wal-Mart. But it's increasingly clear that this is no longer the case. We think what is missing in the minds of investors is the duration over which this sub-par performance will take its toll on the stock. Our estimates are 15% below consensus next year, and 30% by 2019.
Ultimately, TGT will probably survive, as long as management avoids egregious mistakes. But we don't like companies that simply survive - especially without recognizing the precarious position we believe they're in today. The company will likely ultimately do the right thing, but we think the road to survival will be a costly one.
Attendance on this call is limited. Please note if you are not a current subscriber to our Retail research there will be a fee associated with this call. Ping firstname.lastname@example.org for more information.
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