TARGET CORP (TGT) Stock Fundamental Analysis
USA - NYSE:TGT - US87612E1064 - Common Stock
89.42 USD
+0.49 (+0.55%)
89.51 USD
+0.09 (+0.1%)
We assign a fundamental rating of 5 out of 10 to TGT. TGT was compared to 40 industry peers in the Consumer Staples Distribution & Retail industry. TGT has an excellent profitability rating, but there are concerns on its financial health. TGT has a valuation in line with the averages, but on the other hand it scores bad on growth. Finally TGT also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year TGT was profitable.
In the past year TGT had a positive cash flow from operations.
In the past 5 years TGT has always been profitable.
TGT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
TGT has a better Return On Assets (6.79%) than 72.50% of its industry peers.
The Return On Equity of TGT (25.47%) is better than 77.50% of its industry peers.
Looking at the Return On Invested Capital, with a value of 12.20%, TGT belongs to the top of the industry, outperforming 85.00% of the companies in the same industry.
TGT had an Average Return On Invested Capital over the past 3 years of 11.15%. This is above the industry average of 8.47%.
The last Return On Invested Capital (12.20%) for TGT is above the 3 year average (11.15%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.79% | ||
| ROE | 25.47% | ||
| ROIC | 12.2% |
ROA(3y)6.59%
ROA(5y)8.24%
ROE(3y)27.82%
ROE(5y)33.57%
ROIC(3y)11.15%
ROIC(5y)14.5%
1.3 Margins
TGT has a Profit Margin of 3.72%. This is amongst the best in the industry. TGT outperforms 82.50% of its industry peers.
In the last couple of years the Profit Margin of TGT has declined.
With an excellent Operating Margin value of 5.73%, TGT belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
TGT's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 27.79%, TGT perfoms like the industry average, outperforming 60.00% of the companies in the same industry.
In the last couple of years the Gross Margin of TGT has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.73% | ||
| PM (TTM) | 3.72% | ||
| GM | 27.79% |
OM growth 3Y-14.71%
OM growth 5Y-2.48%
PM growth 3Y-16.32%
PM growth 5Y-1.78%
GM growth 3Y-1.24%
GM growth 5Y-1.06%
2. Health
2.1 Basic Checks
TGT has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for TGT has been reduced compared to 1 year ago.
TGT has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, TGT has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.95 indicates that TGT is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of TGT (2.95) is worse than 62.50% of its industry peers.
TGT has a debt to FCF ratio of 5.59. This is a neutral value as TGT would need 5.59 years to pay back of all of its debts.
The Debt to FCF ratio of TGT (5.59) is comparable to the rest of the industry.
A Debt/Equity ratio of 0.99 indicates that 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 67.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.99 | ||
| Debt/FCF | 5.59 | ||
| Altman-Z | 2.95 |
ROIC/WACC1.72
WACC7.09%
2.3 Liquidity
A Current Ratio of 0.99 indicates that TGT may have some problems paying its short term obligations.
The Current ratio of TGT (0.99) is worse than 72.50% of its industry peers.
A Quick Ratio of 0.32 indicates that TGT may have some problems paying its short term obligations.
With a Quick ratio value of 0.32, TGT is not doing good in the industry: 70.00% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.99 | ||
| Quick Ratio | 0.32 |
3. Growth
3.1 Past
The earnings per share for TGT have decreased strongly by -21.38% in the last year.
The Earnings Per Share has been growing slightly by 6.72% on average over the past years.
TGT shows a decrease in Revenue. In the last year, the revenue decreased by -1.55%.
Measured over the past years, TGT shows a small growth in Revenue. The Revenue has been growing by 6.41% on average per year.
EPS 1Y (TTM)-21.38%
EPS 3Y-13.2%
EPS 5Y6.72%
EPS Q2Q%-20.23%
Revenue 1Y (TTM)-1.55%
Revenue growth 3Y0.18%
Revenue growth 5Y6.41%
Sales Q2Q%-0.95%
3.2 Future
Based on estimates for the next years, TGT will show a small growth in Earnings Per Share. The EPS will grow by 3.40% on average per year.
TGT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.86% yearly.
EPS Next Y-15.72%
EPS Next 2Y-4.3%
EPS Next 3Y-1.07%
EPS Next 5Y3.4%
Revenue Next Year-1.21%
Revenue Next 2Y0.38%
Revenue Next 3Y1.1%
Revenue Next 5Y1.86%
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
Based on the Price/Earnings ratio of 11.75, the valuation of TGT can be described as reasonable.
82.50% of the companies in the same industry are more expensive than TGT, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of TGT to the average of the S&P500 Index (27.41), we can say TGT is valued rather cheaply.
The Price/Forward Earnings ratio is 11.02, which indicates a very decent valuation of TGT.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TGT indicates a rather cheap valuation: TGT is cheaper than 85.00% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.88, TGT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.75 | ||
| Fwd PE | 11.02 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TGT indicates a somewhat cheap valuation: TGT is cheaper than 80.00% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TGT indicates a somewhat cheap valuation: TGT is cheaper than 75.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.8 | ||
| EV/EBITDA | 5.76 |
4.3 Compensation for Growth
TGT has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.75
EPS Next 2Y-4.3%
EPS Next 3Y-1.07%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.98%, TGT is a good candidate for dividend investing.
TGT's Dividend Yield is rather good when compared to the industry average which is at 2.01. TGT pays more dividend than 100.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, TGT pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.98% |
5.2 History
On average, the dividend of TGT grows each year by 11.38%, which is quite nice.
TGT has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of TGT decreased recently.
Dividend Growth(5Y)11.38%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
TGT pays out 52.14% of its income as dividend. 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.
DP52.14%
EPS Next 2Y-4.3%
EPS Next 3Y-1.07%
89.42
+0.49 (+0.55%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners86.74%
Inst Owner Change0.89%
Ins Owners0.22%
Ins Owner Change1.36%
Market Cap40.63B
Analysts66.19
Price Target107.55 (20.28%)
Short Float %3.55%
Short Ratio2.38
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.98% |
Yearly Dividend4.46
Dividend Growth(5Y)11.38%
DP52.14%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-9.97%
Min EPS beat(2)-19.93%
Max EPS beat(2)-0.01%
EPS beat(4)1
Avg EPS beat(4)-8.77%
Min EPS beat(4)-20.39%
Max EPS beat(4)5.26%
EPS beat(8)4
Avg EPS beat(8)5.27%
EPS beat(12)7
Avg EPS beat(12)7.63%
EPS beat(16)9
Avg EPS beat(16)2.05%
Revenue beat(2)1
Avg Revenue beat(2)-1.3%
Min Revenue beat(2)-2.72%
Max Revenue beat(2)0.11%
Revenue beat(4)1
Avg Revenue beat(4)-1.31%
Min Revenue beat(4)-2.72%
Max Revenue beat(4)0.11%
Revenue beat(8)1
Avg Revenue beat(8)-0.91%
Revenue beat(12)2
Avg Revenue beat(12)-0.82%
Revenue beat(16)4
Avg Revenue beat(16)-0.54%
PT rev (1m)0.76%
PT rev (3m)0.47%
EPS NQ rev (1m)3.5%
EPS NQ rev (3m)3.78%
EPS NY rev (1m)0.27%
EPS NY rev (3m)-13.26%
Revenue NQ rev (1m)0.43%
Revenue NQ rev (3m)0.48%
Revenue NY rev (1m)0.53%
Revenue NY rev (3m)0.57%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.75 | ||
| Fwd PE | 11.02 | ||
| P/S | 0.38 | ||
| P/FCF | 13.8 | ||
| P/OCF | 6.36 | ||
| P/B | 2.64 | ||
| P/tB | 2.64 | ||
| EV/EBITDA | 5.76 |
EPS(TTM)7.61
EY8.51%
EPS(NY)8.11
Fwd EY9.07%
FCF(TTM)6.48
FCFY7.25%
OCF(TTM)14.05
OCFY15.72%
SpS232.48
BVpS33.93
TBVpS33.93
PEG (NY)N/A
PEG (5Y)1.75
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.79% | ||
| ROE | 25.47% | ||
| ROCE | 15.66% | ||
| ROIC | 12.2% | ||
| ROICexc | 13.75% | ||
| ROICexgc | 13.75% | ||
| OM | 5.73% | ||
| PM (TTM) | 3.72% | ||
| GM | 27.79% | ||
| FCFM | 2.79% |
ROA(3y)6.59%
ROA(5y)8.24%
ROE(3y)27.82%
ROE(5y)33.57%
ROIC(3y)11.15%
ROIC(5y)14.5%
ROICexc(3y)12.58%
ROICexc(5y)21.31%
ROICexgc(3y)12.84%
ROICexgc(5y)22.01%
ROCE(3y)14.31%
ROCE(5y)18.61%
ROICexcg growth 3Y-26%
ROICexcg growth 5Y-2.41%
ROICexc growth 3Y-25.72%
ROICexc growth 5Y-2.23%
OM growth 3Y-14.71%
OM growth 5Y-2.48%
PM growth 3Y-16.32%
PM growth 5Y-1.78%
GM growth 3Y-1.24%
GM growth 5Y-1.06%
F-Score5
Asset Turnover1.83
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.99 | ||
| Debt/FCF | 5.59 | ||
| Debt/EBITDA | 1.68 | ||
| Cap/Depr | 111.83% | ||
| Cap/Sales | 3.26% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 69.98% | ||
| Profit Quality | 74.95% | ||
| Current Ratio | 0.99 | ||
| Quick Ratio | 0.32 | ||
| Altman-Z | 2.95 |
F-Score5
WACC7.09%
ROIC/WACC1.72
Cap/Depr(3y)157.77%
Cap/Depr(5y)142.81%
Cap/Sales(3y)4.08%
Cap/Sales(5y)3.69%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-21.38%
EPS 3Y-13.2%
EPS 5Y6.72%
EPS Q2Q%-20.23%
EPS Next Y-15.72%
EPS Next 2Y-4.3%
EPS Next 3Y-1.07%
EPS Next 5Y3.4%
Revenue 1Y (TTM)-1.55%
Revenue growth 3Y0.18%
Revenue growth 5Y6.41%
Sales Q2Q%-0.95%
Revenue Next Year-1.21%
Revenue Next 2Y0.38%
Revenue Next 3Y1.1%
Revenue Next 5Y1.86%
EBIT growth 1Y-2.72%
EBIT growth 3Y-14.56%
EBIT growth 5Y3.78%
EBIT Next Year44.26%
EBIT Next 3Y15.78%
EBIT Next 5Y17.69%
FCF growth 1Y80.28%
FCF growth 3Y-4.14%
FCF growth 5Y1.82%
OCF growth 1Y-14.43%
OCF growth 3Y-5.12%
OCF growth 5Y0.69%