Target Stock’s Extended Share Repurchase Plan

Target Corp. does not, and has not, grown its profit. This year, it is expected to make about $2.4 billion. That is the same amount of profit that Target earned in the recession year of 2009. As recently as 2015, Target was earning $2.9 billion per year in profits. These downticks in profitability are even more concerning when you consider that Target is perpetually opening up new stores—the implication being that the same-store sales profits are declining at a greater rate than the amount of new profit generated by the new locations.

And yet, despite this absence of profit growth, Target stock (TGT) has managed to deliver earnings per share growth for its investors because it has systematically repurchased its own stock.

In 1999, each share represented 1/900,000,00th of the company. Today, each share represents 1/545,000,000th of the retailer’s overall profits. More recently, Target has reduced its share … Read the rest of this article!