Deutsche Bank Previews Target's Analyst Day, Offers 10 Questions For Management

In a report published Friday, Deutsche Bank analyst Paul Trussell previewed Target Corporation's TGT upcoming Analyst Day and compiled a list of 10 questions that management should comment on.

1. How will in-store presentation change for signature categories, including baby, kids, wellness, and style including the use of mannequins?

2. Should P-Fresh be scrapped for a different approach given the belief that the concept has reached "maturity" and is not driving incremental traffic while diluting margins?

3. Does Target need to match wage increases announced by other retailers given media and investor "scrutiny" of the issue and Target's commitment to maintaining competitive wages and developing talent?

4. How is management thinking about e-commerce & IT and marketing & promotion given the company's believe that its digital growth led the industry in 2014?

5. Can Target's higher AUR (Average Unit Revenue) be sustained given the fact that the company has driven its comp growth primarily through AUR, while traffic has remained challenged?

6. How will small stores play a role in Target's future, and what roll will the concept play in its ship from store initiative?

7. What are capital allocation priorities now that Target is no longer investing in Canada? What is a breakdown of new stores, remodels and IT?

8. What are Target's long-term margin goals following a 116 basis point contraction between 2009 and 2014?

9. Has REDCard "permanently plateaued" following Target achieving its prior 20 percent penetration target?

10. How can Target recapture traffic and share loses while top-line initiatives including price matching are defending share of wallet, but also eroding margins at the same time.

Shares of Target are Hold rated with a $76 price target.