Target Stock Cools Off After Payments Snafu

TGT shares have been on fire in June

Deputy Editor
Jun 17, 2019 at 10:05 AM
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The shares of Target Corporation (NYSE:TGT) are trading lower this morning, after the chain retailer's credit card system ran into two unrelated glitches on Saturday and Sunday that made it impossible to process certain payments. The first outage was due to an "internal technology issue," while the second outage was due to an issue at payments vendor NCR. While both issues have since been resolved, TGT shares are down 1.5% to trade at $86.50. 

Should these losses hold, TGT could be eyeing its second day in the red, following a six-day win streak that had the stock trading right below its all-time highs in the $90 region. In fact, from May 30 through last Thursday, June 13, TGT had closed just one session lower, and still remains up nearly 8% so far this month. The security sports a 14-day Relative Strength Index (RSI) of 73, which plants it firmly in "overbought" territory, suggesting today's short-term breather might have been in the cards.

Despite its recent spike, analysts are split on the equity, with nine calling it a "buy" or better, and 11 giving it a tepid "hold." What's more, the consensus 12-month target price of $88.20 is just slightly higher than current levels. Should Target stock resume its uptrend, a round of upgrades and price-target hikes could add fuel to the equity's fire.

Options traders have been ramping up their bearish bets, too. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) TGT's 10-day put/call volume ratio of  0.84 sits in the 80th percentile of its annual range. While this ratio indicates that call buying has exceeded put buying on an absolute basis, the high percentile hints at a healthier-than-usual appetite for long puts over calls of late. An exodus of option bears could also be a boon for TGT.

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