Selling the Target story

Target CFO Doug Scovanner must be a persuasive guy. William Blair & Co. analyst Mark Miller said he recently spoke with Scovanner, and the conversation reinforced his perception that Target’s retail and credit businesses are at a positive inflection point. In essence, the company has hit bottom and should begin to see an improving performance from here.

“While it is early, and the speed and degree of ultimate improvement is not yet clear, both operating segments are showing clear signs of stabilization after a particularly challenging 2008,” according to Miller.

Even so, he’s convinced the improvements will be substantial enough to justify a major boost to his earnings estimates. Based on improved sell-through rates, lean inventories and stabilization in credit delinquencies, he increased 2009 earnings per share estimates by 25 cents to $2.60.