Wall Street's enthusiasm for Target Corp. began to fade long before the data breach and CEO Gregg Steinhafel's abrupt departure Monday.
A closer look shows that analyst support for the Minneapolis-based retailer started slipping as far back as August, shortly after the stock hit an all-time high of $73.50 in July. Shares fell another 3.7 percent Tuesday to $57.64, after dropping 3.5 percent Monday.
More telling is data from Bloomberg, which shows that just a third of the analysts who cover Target rate the stock a "buy," the lowest percentage of buy support the company has had in the last five years. By contrast, more than 80 percent of analysts had buy recommendations on the stock in 2011, a strong indication that Target might have hit its peak a while ago.
Such dwindling confidence on Wall Street, along with weak sales, missteps in Canada and the colossal data breach, likely culminated in Steinhafel's resignation as opposed to any one thing.
"I wonder if it was just one of those things where it's been wearing on him and it's been wearing on them," Brian Yarbrough, an analyst with Edward Jones, said Tuesday. "It was not working."
Dustee Jenkins, a Target spokeswoman, said Steinhafel and the board agreed that it was the right time for him to step down since they have charted out a "clear path forward" after the breach and are working to accelerate the company's transformation related to its multichannel sales efforts.
As for interim CEO John Mulligan, she said he has been telling his team that "interim does not equal idle." He met with the company's leadership team on Monday and had more meetings on Tuesday.
The timing of Steinhafel's departure seemed to further unnerve investors this week as speculation swirled that Target will soon report disappointing profits. The quarter ended Saturday, just two days before Target said Steinhafel was out, leading many to believe that poor results may have precipitated his resignation.