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Lock On Target for Retail's Best Bargain

NEW YORK ( TheStreet) -- Retail giant Target (TGT - Get Report) has been in the news for all the wrong reasons. Sure, the entire retail sector has struggled with weak foot traffic as a result of winter storms. But on the heels of the company's data breach, which compromised information from millions of credit card holders, Target's also dealing with lack of consumer confidence.

With the shares down 15% since the hacking incident, some investors believe traders have overreacted. I can't blame them. From Wal-Mart (WMT) to TJX Companies (TJX) who hasn't been breached? And why should this situation be any different from the stolen passwords reported by Facebook (FB) and Microsoft (MSFT)?

[Read: Apple Shouldn't Buy Tesla, but (Blank) Should!]

First, let's acknowledge that Target's management never shied away from the scrutiny. The company quickly apologized for the violation and assured customers that they would not be liable for any fraudulent costs incurred from the breach.

The company never downplayed the magnitude of the breach. Nor did they lowball the number of customers believed to have been impacted (an estimated 70 million people). At this point, investors don't know what to make of the stock. While shares have been relatively resilient, it remains to be seen how shoppers will respond in the coming the quarters.

I think that unless you believe this event will have significant long-term effects, these shares present a buying opportunity. This scandal does not change the long-term story. Nor has management altered its strategic plans for 2017.

The company expects earnings of $8 per share over the next three years. It also projects roughly $6 billion in annual revenue from their Canadian operations (where sales have underperformed). So despite this recent scandal, it's encouraging that management chose to not run from its promises, even if the Street would have understood if they did.

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