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Fitch affirms Target's rating at A-, revises outlook to stable

Fitch Ratings on March 15 affirmed Target Corp.'s long-term issuer default rating at A-, and revised its rating outlook to stable from negative.

Fitch said the revised outlook reflects its increased confidence in the Minneapolis-based retailer's ability to generate flat to modestly positive comparable sales and traffic growth, as well as the company's initiatives including store remodels and the rollout of its same-day delivery and curbside pickup service.

The agency also cited Target's reduced debt at about $11.6 billion as of Feb. 3 from $12.7 billion on Jan. 28, 2017.

Fitch said it expects the retailer's annual comparable sales to be flat to modestly positive as a result of digital sales growth, while it expects EBITDA to decline and stabilize in the mid-$6 billion range. Its improved comparable sales outlook is driven by reduced prices and Target's launch of new private brands, among others.