Citigroup Upgrades Target to 'Buy'
Citigroup upgraded Target (TGT ) to buy from hold.
Analyst Deborah Weinswig says announcement that Target may sell one or more of its units is a significant positive, and she believes management will be able to focus solely on better performing Target stores, and on driving earnings higher.
She thinks Target is considering a strategic alternative now, as a return to better health would take too many years and there could be meaningful interested parties that are interested in buying its units. Weinswig says Kohl's comes to mind, as Mervyn's concentration is in California and the Southwest, where Kohl's currently is expanding its footprint.
Also, with slowing new mall growth, she thinks several department store operators would be interested in both the Mervyn's and Marshall Field's locations. Weinswig has a $50 target.