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Goldman Lowers Sears Price Target From $43.00 To $30.00, Reiterates SELL

Tyler Durden's picture




 

As we said yesterday when Sears decided to very unprudently (if very conveniently) post an update of its revolver in its horrendous preannouncement, the company is about to experience some MF Global style "death shorting" having invited every short from miles around to sniff at just how (un)stable its liquidity is. Judging by the action in the pre-market session, where the stock is another 4% lower, we may have been correct. And just to make the lives of key shareholders Eddie Lampert and Bruce Berkowitz even worse, here is Goldman cutting its price target from $43 to $30, while still maintaining a Sell. Alas, this name is going far lower.

 

And, as a reminder, the biggest losers:

 

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Wed, 12/28/2011 - 09:57 | 2015718 Irish66
Irish66's picture

Getting shares to short ain't easy?

Wed, 12/28/2011 - 11:11 | 2015934 CPL
CPL's picture

Reggie has them all, he's been waiting patiently for this trade and RIMM.  Took a year of people shitting on his idea, which was sound in reasoning, but like most of us the governments of the world wanted to "add value" first with taxpayer funds.

 

So here's my analysis of Sears.

SHLD will end up in OTC/PINK sheet.  My price target in five years is $1.56....maybe if it doesn't simply cease to exists along with it's market, the middle class.

 

Unless the government bails it out, which is a possibility because of the Credit facilities Sears extends to their customers.

Wed, 12/28/2011 - 11:30 | 2016023 Freddie
Freddie's picture

Eddie Lamprey = piece of s*it.

I see his pal Bruce Berkowitz owner of the Fairholme Fund owns this dog sh*t stock.  I hope they both ride it down to the dirt.  I feel sorry for the emplyees at Sears and KMart.  Eddie is a asset stripper pirate.

Wed, 12/28/2011 - 12:14 | 2016234 Buckaroo Banzai
Buckaroo Banzai's picture

Wait a second. SELL recco's are as rare as hen's teeth. And, this is Goldman talking here.

Does this mean that Sears is really a BUY??

Or do the PTB want to kill Sears?

Wed, 12/28/2011 - 09:57 | 2015719 GeneMarchbanks
GeneMarchbanks's picture

Seared.

Wed, 12/28/2011 - 10:05 | 2015734 Wakanda
Wakanda's picture

Solid as Sears.

Solidly Seared? 

Is that like very very well done?

Wed, 12/28/2011 - 10:10 | 2015745 Oh regional Indian
Oh regional Indian's picture

I think searing indictment works well too. A searing indictment of the retail sector in general and big retail in particular.

Wonder what the $30 price is backed by, inventory? Land? What they got that can liquidate to even a fraction of the $30? Hollow shells, literally and figuratively.

ori

/the-plan/

Wed, 12/28/2011 - 10:16 | 2015762 gojam
gojam's picture

Agreed,

But surely Sears were 'imprudent' and not "unprudent" ?

Wed, 12/28/2011 - 10:27 | 2015793 Oh regional Indian
Oh regional Indian's picture

Perhaps the Bull at the top was impudent? Or unpudent?

ori

Wed, 12/28/2011 - 10:37 | 2015820 gojam
gojam's picture

Always short porcelain when the proverbial bull imprudently enters the china shop. 

J  ;-)

Wed, 12/28/2011 - 11:42 | 2015739 Shocker
Shocker's picture

The idea of annonouncing 100-120 Store closings 2 Days after Christmas Doesn't really instill confidence among investors.

 

Wed, 12/28/2011 - 12:09 | 2016205 Iam_Silverman
Iam_Silverman's picture

"100-120 Store closings "

Has there been any amplification as to which stores are to be closed - or what criteria will be used?  There are two small Sears retail businesses within 40 miles of where I live.  They will be missed.  Craftsman Tools are still my favorite.  As far as K-Mart, I haven't seen any around me in ages.  I did see some last week while visiting the in-laws in Hampton Roads, Virginia.  They didn't seem to be too overrun with shoppers though.

Wed, 12/28/2011 - 09:58 | 2015720 hugovanderbubble
hugovanderbubble's picture

Thanks Called market timing Goldmanites¡

 

I prefer to tell people to Short STARBUCKS...which is completly expensive vs expected world wide scenario...

SHORT SBUX target 38

 

Ups, im not in Goldman Sachs, sorry...

Wed, 12/28/2011 - 11:25 | 2016000 ZeroPower
ZeroPower's picture

Some anecdotal evidence for you.

Am in Poland currently and SBUX has slowly been creeping up on the Poles like a sly Soviet. Last time i was in Warsaw ~10months ago there was a single one in the Old Town, an exclusive part of the city. A few richer locals would go (latte costs around PLN14, whereas min wage is PLN12/hr ive been told) so a *bit*  out of the population's px range. Mostly tourists and out of towners would come in for their brew.

Today, walked by 3 - all within the financial district of course - with huge signs of 'were hiring for our other Warsaw locations' shown.

Also remember, its a franchise, so much easier to generate CFs in that format and much less risk for the parent, SBUX Inc, to make money and have less at risk in case a particular location doesnt go ideally as planned.

Do i love starbucks? Heck no, much prefer some Canadian equivalents... but just throwing this out there on a financial perspective which does not tell me the market is saturated, especially with CEE countries becoming richer thanks to their Eurozone independantness as opposed to WE becoming a shit hole thanks to the PIIGS.

Wed, 12/28/2011 - 10:01 | 2015723 firstdivision
firstdivision's picture

When did GS change their outlook on SHS to Sell?

OT: Kinda not fun day without the MBA App Index :(  Well at least there's this nifty chart to keep me warm this week. 1998 levels FTMFGlobalW!  http://4.bp.blogspot.com/-gaHgHOsTn_k/TvHO5XRScbI/AAAAAAAALos/WSDRc5o_Tao/s1600/MBADec212011.jpg

 

Wed, 12/28/2011 - 09:59 | 2015724 Poule Mouillee
Poule Mouillee's picture

Short it for some Sears Woe-bucks.

Wed, 12/28/2011 - 10:00 | 2015725 Clam McCain
Clam McCain's picture

why would you want to be long or short this market? unless you are sucking Brian Sack

Wed, 12/28/2011 - 10:00 | 2015726 Mercury
Mercury's picture

I don't know about recently but Cramer loved this thing for years and pimped Eddie Lampert as the next Warren Buffett....

Wed, 12/28/2011 - 10:02 | 2015729 Irish66
Irish66's picture

neighbors and butt buddies

Wed, 12/28/2011 - 10:01 | 2015728 Yikes
Yikes's picture

Horse, barn door, thanks GS.

Wed, 12/28/2011 - 10:02 | 2015732 TheSilverJournal
TheSilverJournal's picture

Every retailer that sells goods to the American consumer is going to get crushed. When the dollar dies, no longer will be the days when the US was able to fool the rest of the world into shipping us their goods in exchange for pieces of paper.

TheSilverJournal.com

Wed, 12/28/2011 - 10:07 | 2015738 hugovanderbubble
hugovanderbubble's picture

the DOW JONES IS OVERVALUED...ENTIRELY

Wed, 12/28/2011 - 10:12 | 2015751 GeneMarchbanks
GeneMarchbanks's picture

LOL.

The caps give away your impatience/frustration;0

PPT.

Wed, 12/28/2011 - 10:22 | 2015771 hugovanderbubble
hugovanderbubble's picture

Im completly frustated ,resignated vs algos...

Just look SP , oil since 20th december.... Rack Rack Rack up,like a olympic medalist climber....

 

I can´t justify oil from 93 to 102....of course this is trading, but in a world which recession gonna be evident and depression is just behind us...oil with all my respects is also expensive.

-

IM CAPPED:)

Have a good 2012 Gene,

Wed, 12/28/2011 - 10:25 | 2015788 GeneMarchbanks
GeneMarchbanks's picture

Thanks. Same to you.

I suggest you find a big trade, take profits, move to Andalucia and forget the S&P ever existed.

Wed, 12/28/2011 - 10:17 | 2015769 RiverRoad
RiverRoad's picture

Sure as heck is.  Look at the chart from 1970 to the present.

Wed, 12/28/2011 - 10:08 | 2015740 virgilcaine
virgilcaine's picture

It seems Lamperts goal was to run the co. into the ground. No'one could run a co. that bad unintentionally.

Wed, 12/28/2011 - 10:30 | 2015802 Vergeltung
Vergeltung's picture

Sears' business model was old and outdated. I don't know if anyone could have saved it, unfortunately....

Wed, 12/28/2011 - 11:34 | 2016044 Freddie
Freddie's picture

Eddie is destroying and bankrupting Sears while Obam is destroying America.  I bet Eddie voted for him.  The tribe love O.

Wed, 12/28/2011 - 10:09 | 2015743 johngaltfla
johngaltfla's picture

Talk about calling the fall after the splat.....

Wed, 12/28/2011 - 10:11 | 2015748 Irish66
Irish66's picture

Tayler what is Fairholmes top holdings?

Wed, 12/28/2011 - 10:11 | 2015749 mark mchugh
mark mchugh's picture

I smell a trap.  Lampert's a Goldman alum.  Good luck, though!

Wed, 12/28/2011 - 10:14 | 2015757 orangedrinkandchips
orangedrinkandchips's picture

Mark

I was thinking the same...as much as the brand et. al. is doomed, it is very very oversold...i mean 10 up days in the last 3 months?

 

but fuck..let's give GS more bonus for calling it so well....just brilliant timing....as always.

Wed, 12/28/2011 - 10:19 | 2015777 dwdollar
dwdollar's picture

And of course we can't leave that go without Ackbar...

http://www.youtube.com/watch?v=dddAi8FF3F4

Wed, 12/28/2011 - 10:12 | 2015750 orangedrinkandchips
orangedrinkandchips's picture

Hindsight is always 20/20.....

 

to Eddie Lambert from Nelson on the simpsons...

 

"AH-HA!"

you couldnt manage yourself out of a paper bag if both ends were open.....seeing that shit a mile away.

 

Wed, 12/28/2011 - 10:12 | 2015752 RiverRoad
RiverRoad's picture

When Lampert bought into Sears it was supposedly for the "real estate" value.  Whatever happened to that?  He could still take those Sears in the malls and turn them into low income (senior?) rental housing with a little help from Congress.  That'd be a new twist on eminent domain and folks could step out  and shop their SS/welfare checks right there.

Wed, 12/28/2011 - 10:16 | 2015763 b_thunder
b_thunder's picture

When Goldman says "Sell and then Sell  Short" on day 1, I go long on day 3

 

Wed, 12/28/2011 - 10:19 | 2015774 vegas
vegas's picture

Death spiral starts at the open. This is what you get when you let a hedge fund manager run a retailer. You get the stubbornness of a trader combined with knowing absolutely nothing about the business you are supposed to be in. End result is shareholder destruction. Sears goes the way of International Harvester and others that had no clue.

 

http://vegasxau.blogspot.com

Wed, 12/28/2011 - 10:24 | 2015785 orangedrinkandchips
orangedrinkandchips's picture

From the ORIGINAL Karate Kid....

 

"GET EM A BODY BAG!"

 

lol.....NOBODY DESERVES IT MORE....NOBODY.

Wed, 12/28/2011 - 10:26 | 2015789 Vergeltung
Vergeltung's picture

Would be sad to see Sears go under.  it's a piece of Americana, a piece of history. their catalog was a real resource for many rural americans, to receive otherwise unavailable semi-necessities via the parcel post. a stark reminder of better times in the USA.

 

sad to see it go......sniff.......  :(

Wed, 12/28/2011 - 10:41 | 2015832 j0nx
j0nx's picture

Thank you Captain Obvious Goldman Sachs...

Wed, 12/28/2011 - 11:13 | 2015947 Georgesblog
Georgesblog's picture

When a company is in trouble, the vultures start circling. Goldman just happens to be the lead vulture. Let us not forget that they have their dirty laundry hanging out in the breeze, too.

http://georgesblogforum.wordpress.com/?s=The+Daily+Climb

Wed, 12/28/2011 - 12:55 | 2016393 Greed
Greed's picture

But, but, but ... havent you guys always been preaching to do the opposite GS does? Doesnt that mean they are actively engaged in buying the crap?

 

So lets upgrade it to strong buy, with a price tag of 90. Its your common advice mentioning GS recommendations, so please hold your line.

Wed, 12/28/2011 - 12:55 | 2016394 Greed
Greed's picture

But, but, but ... havent you guys always been preaching to do the opposite GS does? Doesnt that mean they are actively engaged in buying the crap?

 

So lets upgrade it to strong buy, with a price tag of 90. Its your common advice mentioning GS recommendations, so please hold your line.

Wed, 12/28/2011 - 13:21 | 2016514 cramers_tears
cramers_tears's picture

C'mon Eddie... teach 'em the fundamentals.  Lampert & RBS could be making a fortune if they'd bit the shorts at a nice Halloween 80.  Maybe Eddie could get his insurance to make up the difference.

Wed, 12/28/2011 - 14:32 | 2016752 batterycharged
batterycharged's picture

OMG, did someone piss on the GREEN SHOOTS?  Where are the fucking green shoots!!!

Wed, 12/28/2011 - 15:40 | 2016958 TruthBeforeAll
TruthBeforeAll's picture

Sears needs to spin off it's Craftman brand and close up shop.

Wed, 12/28/2011 - 16:09 | 2017035 Iam_Silverman
Iam_Silverman's picture

"Sears needs to spin off it's Craftman brand "

You mean let somebody else sell Craftsman tools?  Like Ace?

http://www.acehardware.com/family/index.jsp?categoryId=4339735&sr=1&orig...

What about Kenmore?  That is also a highly respected name in appliances.  Has been for years.  Yeah, yeah, I know that most of their appliances are built by others such as GE and Frigidaire.

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