Target (NYSE:TGT) shoppers, be ready for a major change coming very soon. If you like to take your checkbook to Target, you won’t be doing that very soon, as the retailer is poised to refuse your personal check right at checkout. The news didn’t sit well with investors, and shares slipped fractionally in Tuesday afternoon’s trading.
Starting July 15—just two days after Red Circle week concludes—Target stores will no longer take personal checks as payment. It would be easy to wonder why Target wouldn’t take the financial instruments, especially given that nine out of 10 Americans still reportedly turn to them on at least an annual basis. But turn them away Target is, and investors aren’t happy about it.
The reason? Target cites a shift in the overall landscape, as customers tend more toward either raw cash or more advanced services, like credit cards, debit cards, and mobile payment platforms via a smartphone app. With customers either going primitive or futuristic, the middle ground of checks just isn’t what it used to be.
Further Shakeups Ahead
Meanwhile, Target is poised to crack down on shoplifting in its stores, a phenomenon that’s been hitting the bottom line and forcing more stores—not just Target, either—to move to a markedly inconvenient shopping system in which nearly every item is locked up in a glass case. Target is also focusing harder on shoplifting prevention, telling employees to stop thefts that are worth at least $50.
It’s hoped that by “employees,” Target means “professionally-trained loss prevention” team members and not “Timmy on the checkout counter.” But given that Target now considers shoplifting a “significant financial headwind,” the end result is that something needs to be done. And this may be just the thing in question.
Is Target Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TGT stock based on 16 Buys, 10 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 16.4% rally in its share price over the past year, the average TGT price target of $177.63 per share implies 19.51% upside potential.
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