USA TODAY

USA TODAY

Q: Was Target (TGT) wise to bail on Canada?

A: Target is trying to get its cachet back, and one way to do that is to bail on unprofitable ventures. And Canada is one example.

Shares of Target rose Thurday after the retailer said its Canadian with receive credit protection in the northern nation. This is an important first step in Target to clear out of Canada and close its more than 130 stores in the nation.

There are certainly costs associated with Target's exit from Canada. Target warned investors it plans to take a $ 5.4 billion pre-tax loss on discontinued operations, including Canada in the fourth quarter. There could be another $ 275 million pre-tax hit in fiscal 2015. Despite all this, investors are pleased to see Target bail on Canada simply because it wasn't working. Target's Canadian unit wasn't expected to be profitable for at least another six years. Target, instead, needs to focus on reinvigorating its U.S. business. Getting the U.S. business back on track is critical, since a "vast majority" of the company's revenue are generated here, according to Target's regulatory filing. There's still lots of work to do, and analysts aren't hopeful yet. Analysts rate Target a "hold" and have an 18-month price target of $ 70, which is 8% below the Thursday's closing price.

USA TODAY markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.