TARGET CORP (TGT) Stock Fundamental Analysis
NYSE:TGT - New York Stock Exchange, Inc. - US87612E1064 - Common Stock - Currency: USD
Taking everything into account, TGT scores 6 out of 10 in our fundamental rating. TGT was compared to 40 industry peers in the Consumer Staples Distribution & Retail industry. While TGT belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. TGT is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
TGT had positive earnings in the past year.
TGT had a positive operating cash flow in the past year.
TGT had positive earnings in each of the past 5 years.
TGT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.47%, TGT is in the better half of the industry, outperforming 76.92% of the companies in the same industry.
Looking at the Return On Equity, with a value of 30.16%, TGT belongs to the top of the industry, outperforming 87.18% of the companies in the same industry.
With an excellent Return On Invested Capital value of 13.03%, TGT belongs to the best of the industry, outperforming 87.18% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for TGT is significantly above the industry average of 8.35%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.47% | ||
| ROE | 30.16% | ||
| ROIC | 13.03% |
ROA(3y)8.53%
ROA(5y)8.36%
ROE(3y)36.57%
ROE(5y)33.54%
ROIC(3y)14.84%
ROIC(5y)15.04%
1.3 Margins
Looking at the Profit Margin, with a value of 4.06%, TGT belongs to the top of the industry, outperforming 92.31% of the companies in the same industry.
TGT's Profit Margin has been stable in the last couple of years.
With an excellent Operating Margin value of 5.58%, TGT belongs to the best of the industry, outperforming 92.31% of the companies in the same industry.
In the last couple of years the Operating Margin of TGT has remained more or less at the same level.
TGT's Gross Margin of 28.39% is fine compared to the rest of the industry. TGT outperforms 64.10% of its industry peers.
TGT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.58% | ||
| PM (TTM) | 4.06% | ||
| GM | 28.39% |
OM growth 3Y-9.5%
OM growth 5Y-0.61%
PM growth 3Y-6.2%
PM growth 5Y-0.23%
GM growth 3Y-2.17%
GM growth 5Y-1.15%
2. Health
2.1 Basic Checks
TGT has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for TGT has been increased compared to 1 year ago.
TGT has less shares outstanding than it did 5 years ago.
TGT has a better debt/assets ratio than last year.
2.2 Solvency
TGT has an Altman-Z score of 3.14. This indicates that TGT is financially healthy and has little risk of bankruptcy at the moment.
TGT has a Altman-Z score of 3.14. This is comparable to the rest of the industry: TGT outperforms 43.59% of its industry peers.
The Debt to FCF ratio of TGT is 3.52, which is a good value as it means it would take TGT, 3.52 years of fcf income to pay off all of its debts.
TGT's Debt to FCF ratio of 3.52 is fine compared to the rest of the industry. TGT outperforms 71.79% of its industry peers.
TGT has a Debt/Equity ratio of 0.99. This is a neutral value indicating TGT is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.99, TGT is doing worse than 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.99 | ||
| Debt/FCF | 3.52 | ||
| Altman-Z | 3.14 |
ROIC/WACC1.67
WACC7.79%
2.3 Liquidity
A Current Ratio of 0.94 indicates that TGT may have some problems paying its short term obligations.
TGT has a Current ratio of 0.94. This is in the lower half of the industry: TGT underperforms 71.79% of its industry peers.
A Quick Ratio of 0.25 indicates that TGT may have some problems paying its short term obligations.
TGT has a worse Quick ratio (0.25) than 76.92% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.25 |
3. Growth
3.1 Past
TGT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.28%, which is quite impressive.
TGT shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.54% yearly.
TGT shows a small growth in Revenue. In the last year, the Revenue has grown by 0.64%.
The Revenue has been growing slightly by 7.35% on average over the past years.
EPS 1Y (TTM)20.28%
EPS 3Y-1.8%
EPS 5Y10.54%
EPS Q2Q%-11.9%
Revenue 1Y (TTM)0.64%
Revenue growth 3Y4.71%
Revenue growth 5Y7.35%
Sales Q2Q%1.06%
3.2 Future
TGT is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.19% yearly.
Based on estimates for the next years, TGT will show a small growth in Revenue. The Revenue will grow by 2.84% on average per year.
EPS Next Y-1.8%
EPS Next 2Y2.62%
EPS Next 3Y5.03%
EPS Next 5Y8.19%
Revenue Next Year-0.8%
Revenue Next 2Y0.87%
Revenue Next 3Y1.72%
Revenue Next 5Y2.84%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 13.18 indicates a correct valuation of TGT.
TGT's Price/Earnings ratio is a bit cheaper when compared to the industry. TGT is cheaper than 76.92% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.63, TGT is valued rather cheaply.
A Price/Forward Earnings ratio of 13.22 indicates a correct valuation of TGT.
Based on the Price/Forward Earnings ratio, TGT is valued a bit cheaper than 76.92% of the companies in the same industry.
TGT is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.18 | ||
| Fwd PE | 13.22 |
4.2 Price Multiples
66.67% of the companies in the same industry are more expensive than TGT, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, TGT is valued cheaper than 87.18% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.53 | ||
| EV/EBITDA | 7.96 |
4.3 Compensation for Growth
The excellent profitability rating of TGT may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.25
EPS Next 2Y2.62%
EPS Next 3Y5.03%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.48%, TGT has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.53, TGT pays a better dividend. On top of this TGT pays more dividend than 94.87% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, TGT pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.48% |
5.2 History
The dividend of TGT is nicely growing with an annual growth rate of 11.60%!
TGT has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of TGT decreased recently.
Dividend Growth(5Y)11.6%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
46.70% of the earnings are spent on dividend by TGT. This is a bit on the high side, but may be sustainable.
TGT's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP46.7%
EPS Next 2Y2.62%
EPS Next 3Y5.03%
124.27
-3.86 (-3.01%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners82.98%
Inst Owner Change-0.71%
Ins Owners0.18%
Ins Owner Change3.64%
Market Cap56.94B
Analysts72.86
Price Target148.14 (19.21%)
Short Float %2.38%
Short Ratio2.11
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.48% |
Yearly Dividend4.36
Dividend Growth(5Y)11.6%
DP46.7%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.93%
Min EPS beat(2)-20.39%
Max EPS beat(2)16.53%
EPS beat(4)2
Avg EPS beat(4)4.01%
Min EPS beat(4)-20.39%
Max EPS beat(4)22.09%
EPS beat(8)6
Avg EPS beat(8)16.82%
EPS beat(12)7
Avg EPS beat(12)3.46%
EPS beat(16)11
Avg EPS beat(16)7.33%
Revenue beat(2)0
Avg Revenue beat(2)-0.94%
Min Revenue beat(2)-1.86%
Max Revenue beat(2)-0.02%
Revenue beat(4)0
Avg Revenue beat(4)-0.88%
Min Revenue beat(4)-1.86%
Max Revenue beat(4)-0.02%
Revenue beat(8)1
Avg Revenue beat(8)-0.76%
Revenue beat(12)2
Avg Revenue beat(12)-0.66%
Revenue beat(16)5
Avg Revenue beat(16)0.38%
PT rev (1m)1.02%
PT rev (3m)-18.06%
EPS NQ rev (1m)4.46%
EPS NQ rev (3m)-21.9%
EPS NY rev (1m)0.97%
EPS NY rev (3m)-9.2%
Revenue NQ rev (1m)1.76%
Revenue NQ rev (3m)-0.63%
Revenue NY rev (1m)0.43%
Revenue NY rev (3m)-0.36%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.18 | ||
| Fwd PE | 13.22 | ||
| P/S | 0.53 | ||
| P/FCF | 12.53 | ||
| P/OCF | 7.73 | ||
| P/B | 3.93 | ||
| P/tB | 3.93 | ||
| EV/EBITDA | 7.96 |
EPS(TTM)9.43
EY7.59%
EPS(NY)9.4
Fwd EY7.57%
FCF(TTM)9.92
FCFY7.98%
OCF(TTM)16.08
OCFY12.94%
SpS234.76
BVpS31.62
TBVpS31.62
PEG (NY)N/A
PEG (5Y)1.25
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.47% | ||
| ROE | 30.16% | ||
| ROCE | 16.34% | ||
| ROIC | 13.03% | ||
| ROICexc | 14.37% | ||
| ROICexgc | 14.37% | ||
| OM | 5.58% | ||
| PM (TTM) | 4.06% | ||
| GM | 28.39% | ||
| FCFM | 4.23% |
ROA(3y)8.53%
ROA(5y)8.36%
ROE(3y)36.57%
ROE(5y)33.54%
ROIC(3y)14.84%
ROIC(5y)15.04%
ROICexc(3y)19.57%
ROICexc(5y)22.13%
ROICexgc(3y)20.1%
ROICexgc(5y)22.89%
ROCE(3y)18.62%
ROCE(5y)18.87%
ROICexcg growth 3Y-27.25%
ROICexcg growth 5Y0.99%
ROICexc growth 3Y-26.63%
ROICexc growth 5Y1.17%
OM growth 3Y-9.5%
OM growth 5Y-0.61%
PM growth 3Y-6.2%
PM growth 5Y-0.23%
GM growth 3Y-2.17%
GM growth 5Y-1.15%
F-Score8
Asset Turnover1.84
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.99 | ||
| Debt/FCF | 3.52 | ||
| Debt/EBITDA | 1.6 | ||
| Cap/Depr | 95.86% | ||
| Cap/Sales | 2.62% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 82.33% | ||
| Profit Quality | 104.01% | ||
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.25 | ||
| Altman-Z | 3.14 |
F-Score8
WACC7.79%
ROIC/WACC1.67
Cap/Depr(3y)170.15%
Cap/Depr(5y)146.66%
Cap/Sales(3y)4.29%
Cap/Sales(5y)3.92%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)20.28%
EPS 3Y-1.8%
EPS 5Y10.54%
EPS Q2Q%-11.9%
EPS Next Y-1.8%
EPS Next 2Y2.62%
EPS Next 3Y5.03%
EPS Next 5Y8.19%
Revenue 1Y (TTM)0.64%
Revenue growth 3Y4.71%
Revenue growth 5Y7.35%
Sales Q2Q%1.06%
Revenue Next Year-0.8%
Revenue Next 2Y0.87%
Revenue Next 3Y1.72%
Revenue Next 5Y2.84%
EBIT growth 1Y17.52%
EBIT growth 3Y-5.24%
EBIT growth 5Y6.69%
EBIT Next Year56.2%
EBIT Next 3Y20.02%
EBIT Next 5Y14.56%
FCF growth 1Y351.94%
FCF growth 3Y-21.47%
FCF growth 5Y9.2%
OCF growth 1Y105.78%
OCF growth 3Y-6.44%
OCF growth 5Y7.62%