Transition Year CEO + Capex Reset

The framework reads the new IV.12 archetype as bearish when a chief executive transition (within 12 months of the new appointment) coincides with a material capex guide increase (≥25% YoY) framed as a "turnaround," "reset," or "investment year" while comparable-basis revenue or comp metrics are declining concurrently. The pattern fires when at least three of four conditions are met: transition timing, capex magnitude, framing language, and operational deceleration. Target's FY26 cycle (Fiddelke transition + capex $4B → $5B = +25.0% + comp -2.6%) is the framework's canonical case. Lululemon's FY26 (Frank/Maestrini interim + international capex commitment + Americas -1%) is the second canonical case.

The framework's read is structural. New CEOs face institutional pressure to demonstrate decisive strategic action; sustained capex increases framed as transformation provide visible action without committing to specific operational outcomes within typical performance review windows. The combination of CEO transition, increased capex, and concurrent operational deceleration produces the diagnostic conditions that historically precede multi-year operational underperformance. The pattern's resolution depends on whether the capex deployment produces operational improvement within 24-36 months. Most cases the framework documents show the capex spending compounding rather than resolving the underlying operational issues.

The framework's case library on the new IV.12 archetype is limited to two canonical cases (TGT and LULU) given the v1.5 promotion timing, with cross-domain validation pending v1.6+ work. Historical comparable patterns (executive transitions with capex acceleration during operational deceleration) typically resolve across 18-36 months. The pattern's resolution can include operational recovery if the capex deployment produces measurable improvement, executive replacement if the transition operator cannot stabilize the operational metrics, or sustained underperformance if the structural conditions producing the firing do not resolve. The framework's per-ticker reads on the live engine track the cycle position.

Target's FY26 cycle is the framework's canonical IV.12 case. The CEO transition (Brian Cornell to Michael Fiddelke) occurred alongside capex guide expansion from approximately $4B to $5B representing exactly +25.0% YoY increase, framed by management as turnaround investment. Comparable-basis sales showed -2.6% trajectory through the relevant quarters. The combination of transition timing, capex magnitude at the inclusive threshold, framing language, and concurrent comp deceleration produced the four-condition firing at M3 magnitude. The case is studied as the framework's reference for the new IV.12 pattern with specific magnitude attribution preserved through the FS-15 inclusive-threshold ratification.

The framework does not produce sell signals on single-pattern firings. The diagnostic question is whether IV.12 is firing alone or alongside composite archetypes — geographic mix masking, executive lifeboat, margin bleed, post-M&A digestion, capital allocation discipline questions. Single-pattern firings often resolve through normal operational paths with appropriate sizing reduction. Composite firings — when IV.12 fires with multiple reinforcing patterns — produce the multi-quarter drawdowns the framework's case library documents. The framework's Interrogator surface walks through the composite read for any ticker, archetype by archetype, before sizing decisions. Free registration shows the per-ticker composite reads on the live engine.