Target bought back another $1.7B worth of stock (33.8M shares) at an average price just north of $50/share. I am initiating that price as my new stop loss level on the short side.
Below I have attached capital intensity charts for WMT and TGT. Pershing Square likes playing the levered long investing game. Unfortunately that shortsighted strategy was best served for years that are behind us now. The economic cycle has changed course. As cost of capital increases and access to capital tightens, we want to own prudent management teams that are cutting capex and holding cash in the bag for the rainy days that cometh.
*Full Disclosure: I remain long WMT and short TGT in our “Hedgeye Portfolio”