When activist investor William Ackman comes to town and starts buying your shares, you can bet he’ll be hounding the board for changes soon. That’s the case with reduction retailer Target Corp. (NYSE: TGT), as Ackman now owns right under 10% of the retailer’s shares. What does he have in store? fairly a few changes that should boost the retailer’s stock price in the next three years and give Ackman a good-looking return on his investment.

First up was Ackman’s suggestion that Target sell off its credit card operations — something that management said would be considered. Just under three weeks ago, Target officials cited “market conditions” as the reason a decision to spin its credit card trade had been delayed. In other words, Target probably had not found a buyer for the debt portfolio due to consumer credit

having been tightened like a noose in the final calendar quarter of 2007.

What else did Ackman have in intellect? He believes the company’s shares could be worth $120 each within 36 months, based on an investor letter he wrote on December 27. On tap was Target’s need to total its $10 billion stock buyback and start ramping up cash flows based on all the real estate the company holds — which Ackman pegs at $42 billion in worth. That’s roughly Target’s entire market capitalization, so the question becomes one of how Target is going to prepare money external of selling diapers, pretzels and spring apparel. Expect those questions to be answered on Target’s next quarterly results conference call on February 26.

Original post by Brian White

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