Ahead of the Bell: Target downgraded
Cowen and Co. lowered its rating on Target and its trimmed its price expectations Tuesday, anticipating that the retailer will have to suspend its share repurchase program indefinitely in the aftermath of a massive data breach.
Hackers stole data from credit and debit card accounts and also pilfered personal information, including email addresses, phone numbers, home addresses and names of as many as 70 million customers.
Cowen analyst Faye Landes believes Target could face a significant legal bill, as well as costs to replace cards and computerized cash registers.
Landes says Target Corp. has been keeping an eye on its cash, noting that the chain didn't buy back any shares in the third quarter because of softness in some regions. Credit ratings agencies will probably want Target to be conservative with its cash until the full magnitude of the data breach is clear, which Landes anticipates could take years.
Cowen cut its rating on the company's stock to "Underperform" from "Market Perform" and reduced its price target to $47 from $66.
Shares of Target shed 39 cents to $59.85 in premarket trading.