Broker Cuts Target Earnings Outlook After Data Theft

Tuesday, 24 Dec 2013 12:41 PM

 

  Comment  |
   Contact  |
  Print  
|  A   A  
  Copy Shortlink

Brokerage Cowen and Co. cut its earnings forecast on Target Corp. after the massive theft of card data over the holiday season, saying the breach was likely to drive away customers and impact margins as the retailer increases discounts.

Investors have so far downplayed the impact from hackers who stole data on up to 40 million credit and debit cards from Target shoppers during the first three weeks of the holiday season.

Shares of the third-largest U.S. retailer have fallen just 3 percent since the data theft was revealed, on expectations the one-off impact will be small.

Cowen said it was hard to quantify the effect of the breach but expects some loss of customers and an impact from increased discounting, such as the chain's 10 percent storewide price cuts over the weekend.

The brokerage cut its fourth-quarter profit forecast to $1.40 per share from $1.52, excluding Target's operations in Canada and one-time items. That is still higher than the average analyst estimate of $1.25 per share for the quarter, according to Thomson Reuters I/B/E/S.

Target has not updated its earnings forecast since the breach was revealed.

Retail consultancy Customer Growth Partners LLC said on Monday that Target suffered from a 5 percent reduction in customer traffic over the weekend in the wake of the breach.

But shoppers interviewed at Target stores said they were using cash more rather than staying away.

"No place is safe. Any place you shop, you take your chances," said Alan Rios, 43, a doctor from West Nyack, New York.

The blog that first revealed the data theft, KrebsOnSecurity.com, says card details stolen from Target have flooded onto online markets that sell stolen credit cards.

Target shares were down 0.7 percent at $61.45 in morning trade on the New York Stock Exchange.

© 2014 Thomson/Reuters. All rights reserved.

  Comment  |
   Contact  |
  Print  
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 

You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved