If you listened to the Target's conference call about a month ago, sell side analyst's tried to make a big deal about the credit card operations. Management told them their logic was flawed and they didn't know what they were talking about. Target issued credit cards primarily to people that held Target corporate cards already and were current on their payments. Target doesn't issues cards like banks do and maintains a much higher credit quality customer.
Kohl's growth rate will slow down as they get bigger and they compete with Mervyn's not Target.
Your logic is flawed. Whether TGT's credit card operations have a negative affect on TGT's bottom line, is not the issue. The issue is what is the perception in investor's minds after the Baron's article- following a similar happening to Sears. I predict that it will have a very negative affect on TGT's price, especially when TGT's PE ratio is much, much higher than Sears. We'll see tomorrow.