Interestingly, REDcard penetration soared to 19.3% in 2013 as U.S. buyers became extremely cost conscious, pressured by increased taxes, slow job growth, higher healthcare cost and gasoline inflation. Going forward, we expect Target's RPSF to improve at a moderate rate for the next five-six years driven by increasing REDcard adoption, growth of online business and expansion of smaller format stores. Conversely, if economic growth remains sluggish, impact of data breach lingers longer than expected and these efforts fail to bear fruit, limiting RPSF to $340, there can be about 5%-10% downside to our price estimate for Target.
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