This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Target Security Breach Risks Hurting Sales, Say Analysts

NEW YORK (TheStreet) - Target (TGT - Get Report) shares were essentially flat Friday morning, one day after the big discount retailer announced a massive security breach at its 1,800 U.S. stores.

Analysts agree that the event is likely to hurt sales at Target's stores at a crucial time, although they disagree on how significant that damage could be. One says the risk to sales should be "manageable," although another is less sanguine.

Shares recently were up 8 cents, or 0.1%, at $62.28.

The stock shed 2% Thursday following the Minneapolis-based retailer's disclosure that it found "unauthorized access" to data on more than 40 million customers' credit and debit cards over three weeks ending Dec. 15.

Hackers were able to gain access to data including "customer name, credit or debit card number, and the card's expiration date and CVV (the three-digit security code)," Target said.

Purchases made on or at its Canada stores were not affected, the company said.

It's a bad time to announce a security breach, as it comes at the tail end of the busy holiday shopping season. The risk of lost sales for Target should be manageable, however, according to J.P. Morgan analyst Christopher Horvers.

"The timing of the incident just prior to four of the historically top [five] holiday selling days (including Super Saturday) clearly exacerbates the impact as customers may be wary to shop at TGT or use their credit cards," Horvers writes in a Dec. 19 note.

"We estimate that this upcoming week could represent up to 15% of this quarter's sales, and if 10% of customers are impacted, and considering the fact that [approximately] 20% of sales are from [Target] REDcard holders, we estimate a 25-50-bps impact to comps," the note says. Horvers rates the stock at neutral and has a 12-month price target of $63.55.

The company is also likely to endure a settlement payment, given that the breach is not via third-party processors.

"Looking at past data breaches, in 2007 TJX reported that hackers broke into its systems and stole [approximately] 45.7mm credit and debit card numbers. The incident resulted in TJX paying $9.7 [million] in a state-level settlement as well as $24 [million] to cover costs by banks that issue MasterCards, and $40.9 [million] to Visa's issuers," Horvers writes.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
TGT $80.44 -1.45%
AAPL $124.24 0.70%
FB $83.01 0.11%
GOOG $555.17 -0.65%
TSLA $190.41 -2.00%


DOW 17,678.23 -40.31 -0.23%
S&P 500 2,056.15 -4.90 -0.24%
NASDAQ 4,863.3620 -13.1570 -0.27%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs