UPDATE: ISI Group Downgrades Target on Traffic Pressures

In a report published Thursday, ISI Group analyst Greg Melich downgraded the rating on

from Strong Buy to Buy. In the report, ISI Group noted, “We continue to believe doubling of FCF in 2014 will drove buybacks to $3bn, while Canada will begin generating positive EBITDA, a swing of $500m. That said, traffic pressures in the U.S. are likely to keep comps subdued until 2014 when mobile initiatives gain traction or margin risks will rise. Target's results looks more like Walmart, so while we believe it should get a slight premium (given Canada still depressed, better sales upside optionality, FCF outlook), the multiple is more likely to stay under 14x.” Target Corporation closed on Wednesday at $65.50.