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Janney analyst expects Target to focus on price

Janney Capital Markets analyst David Strasser says Target Corp. may become more aggressive about its pricing in the near future.

THE OPINION: Target's customer traffic has fallen for the past three quarters due to the tough economy and increasing online competition. The retailer has traditionally protected its margins at the expense of sales.

But Strasser said Monday in a research note that he believes the company has recognized the need to change tactics as the key holiday season approaches, and he expects Target will use price and value to lure more shoppers to its doors.

The analyst said Target has made efforts to draw shoppers during past holiday periods, such as a price match guarantee to offer lower prices versus local competitors and online retailers. However, he believes the company needs to simplify this effort to get the full impact with consumers. He also expects it will make other efforts to lower prices and highlight that in its marketing.

Strasser predicted the company will take a cautious tone at its analyst meeting on Thursday as it reevaluates its promotional stance heading into the holidays.

THE STOCK: Target shares added 71 cents to $64.78 by early afternoon. Its shares took a sharp plunge this summer and have not recovered, trading in a rocky fashion for the past two months.

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