Share repurchase program suspended

Target pulled the plug on its share repurchase program, which is too bad for shareholders, considering the huge pullback in the company’s stock price. Through the end of the third quarter, Target had acquired approximately 93.3 million shares at an average price of $51.70 and spent roughly $4.8 billion.

As recently as mid-September, Target shares traded above $55, but the company’s stock along with the rest of the market tumbled throughout late September and October. Cfo Doug Scovanner said the decision to suspend repurchase activity was done out of a desire to avoid doing anything that might harm the company’s credit rating.

“It is our judgment if we continued to execute our share repurchase plan at the pace we once envisioned that would constitute doing something that is within our control that might well have an adverse impact on our short term credit ratings,” Scovanner said. “It seems only intelligent to pause and be very careful until we see some improvement in our underlying business results to be able to once again fire up the share repurchase program.”