Target Corporation (TGT)  

​Target Extends Repurchase Program by $5 Billion


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Rebecca McClay | FlashRatings | Wednesday, September 21, 2016 2:17 PM EDT
Target Corp. (TGT) has approved a $5-billion share repurchase program that extends its current $10 billion program slated to expire before the end of this fiscal year, the company said.
 
The Minneapolis-based retail giant also declared a regular quarterly dividend of 60 cents per share payable on Dec. 10. 

“Today’s announcements reinforce Target’s longstanding commitment to thoughtfully returning cash to shareholders while continuing to prioritize investing in our business,” said Cathy Smith, Target vice president and CFO, in a Sept. 21 statement. She said Target is “focused on extending our record of annual dividend increases, which have occurred every year since 1971.”

Under the current program that was initiated in 2012, Target has repurchased 125 million shares for $8.8 billion, or about 18.6 percent of shares outstanding when the buyback kicked off.

Analysts have been skeptical of TGT as of late. In the past 30 days, none of the four firms that have issued reports on TGT have been positive. Their median price target is $65, which represents a 6 percent downside from recent trading prices. 

Among the firms bearish on TGT, Credit Suisse maintained a “neutral” rating on the shares while reducing its price target to $65 from $72.
“TGT’s recovery has stalled, and its outlook once again is uncertain,” Credit Suisse analysts said in a Sept. 16 note. “Structural headwinds and underinvestment in key segments of the business now seem to be weighing on the company. Margins look poised to head lower over time and consensus estimates carry some risk.”
 
And Cowen downgraded Target to “market perform” from “outperform” while reducing its price target to $68 from $75. In a Sept. 12 note, Cowen analysts noted that “TGT is losing share to the likes of Amazon and Wal-Mart.”