Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Target (TGT) Is Unlikely To Hit Consensus In December, Sell-Off Likely

|Includes: Target Corporation (TGT)

On November 29th, the last day before the critical December month, Target management released numbers below analyst expectations for November sales. The street wanted to see comps of +2% for the important month but instead were given (1.0%). Investors and analysts alike have bought into the holiday strength story and shares have since stayed flat amid bullish sentiment and hope. Investors are banking that sales will pick up as we edge closer to the 25th even though management guided to numbers in the mid-single digits.

Institutional Insider does not see evidence for holiday strength in sales to pick up. Since the November numbers were released, Institutional Insider has increased in-person channel checks to Target stores to twice a day, once at approximately mid-day, and again at approximately 6-7pm. We have noticed significant slow-down from the levels that we experienced last year (we have been conducting these channel checks on Target for the past 3 years). Our checks have revealed less foot-traffic, not only YoY, but less compared to periods of time last year where seasonality was expected to be lower.

Our channel traffics were confirmed through interviews with Target employees that expressed the same bearish sentiment. Though having to deal with fewer annoying customers is better for employees, this will cause shares to drop when they release negative numbers again in December. With 2 more weeks left, we have seen enough of the story and believe this represents a good short opportunity.

In the words of George Bush Jr, "Fool me once… shame on… shame on you... Fool me, you can't get fooled again." Institutional Insider believes shares will remain flat or sell-off until the December monthly comp numbers are released, at which point they will gap lower. We do not see Target hitting the "low to mid-single digit" target.