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TheStreet Open House

Target Ousts Its Scapegoat CEO, but That's No Sign to Buy: StockTwits

Stocks in this article: TGT

$TGT Target targeted for "doing the right thing," holding the CEO responsible for not handling a major issue well. Sell June cov. calls. -- David Durand (@SunAndStorm) May. 5 at 11:31 AM

But others said that, even if today's news is viewed through a positive lens, Target still has too many challenges to warrant buying the stock. Same-store U.S. sales fell 2.5% in the fourth quarter, compared to the prior year. The company blames the data breach for keeping U.S. customers away, however some investors argue its product mix has become less appealing to consumers. Also, the company still faces risks of credit card companies demanding reimbursement for alleged counterfeit fraud purchases and civil litigation.

I'm a Target fan but they need to do more before I can say it's a buy. Today's news is good, but more is needed. $TGT -- Eddy Elfenbein (@EddyElfenbein) May. 5 at 11:10 AM

Perhaps most importantly, Target is still struggling to gain traction in Canada. The company opened 124 stores in the U.S.'s northern neighbor starting last year. It made $623 million worth of sales in Canada during the last three months of the year, but with a margin of only 4.4%. Canadian operations reduced Target's earnings in the fourth quarter by $0.40. They reduced earnings in 2013 by $1.13 per share.

Given Target's challenges, investors said Monday not to feel bad for the CEO -- who has a generous severance package -- but for holders of the stock.

$TGT If fired,CEO gets 9.2M from ODCP+11M severance+6.3M RSU; TOTAL 26.6M.Don't feel sorry for him but feel sorry for the stock and longs ;) -- Rayne Woo (@Rayneman) May. 5 at 01:30 PM

>>Read More: Refiners May Have Already Peaked For 2014

>>Read More: Big Bank Breakup Looks Good for Investors, Bad for Execs: KBW

>>Read More: Economy Not in Recession; Short in May and Go Away: Best of Kass

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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