TARGET CORP (TGT) Stock Fundamental Analysis
NYSE:TGT - New York Stock Exchange, Inc. - US87612E1064 - Common Stock - Currency: USD
Overall TGT gets a fundamental rating of 5 out of 10. We evaluated TGT against 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 has a valuation in line with the averages, but it does not seem to be growing. 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.
TGT had positive earnings in each of the past 5 years.
Each year in the past 5 years TGT had a positive operating cash flow.
1.2 Ratios
TGT's Return On Assets of 7.45% is amongst the best of the industry. TGT outperforms 85.00% of its industry peers.
TGT's Return On Equity of 28.00% is fine compared to the rest of the industry. TGT outperforms 80.00% of its industry peers.
With an excellent Return On Invested Capital value of 13.42%, TGT belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for TGT is above the industry average of 8.23%.
The 3 year average ROIC (11.15%) for TGT is below the current ROIC(13.42%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.45% | ||
| ROE | 28% | ||
| ROIC | 13.42% |
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's Profit Margin of 3.95% is amongst the best of the industry. TGT outperforms 87.50% of its industry peers.
In the last couple of years the Profit Margin of TGT has declined.
TGT has a better Operating Margin (6.05%) than 90.00% of its industry peers.
In the last couple of years the Operating Margin of TGT has declined.
TGT has a Gross Margin of 28.05%. This is in the better half of the industry: TGT outperforms 65.00% of its industry peers.
TGT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.05% | ||
| PM (TTM) | 3.95% | ||
| GM | 28.05% |
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.
TGT has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, TGT has less shares outstanding
The debt/assets ratio for TGT has been reduced compared to a year ago.
2.2 Solvency
TGT has an Altman-Z score of 3.13. This indicates that TGT is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of TGT (3.13) is worse than 65.00% of its industry peers.
TGT has a debt to FCF ratio of 4.38. This is a neutral value as TGT would need 4.38 years to pay back of all of its debts.
TGT has a better Debt to FCF ratio (4.38) than 62.50% of its industry peers.
TGT has a Debt/Equity ratio of 0.96. This is a neutral value indicating TGT is somewhat dependend on debt financing.
TGT's Debt to Equity ratio of 0.96 is on the low side compared to the rest of the industry. TGT is outperformed by 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.96 | ||
| Debt/FCF | 4.38 | ||
| Altman-Z | 3.13 |
ROIC/WACC1.78
WACC7.54%
2.3 Liquidity
A Current Ratio of 0.94 indicates that TGT may have some problems paying its short term obligations.
The Current ratio of TGT (0.94) is worse than 72.50% of its industry peers.
TGT has a Quick Ratio of 0.94. This is a bad value and indicates that TGT is not financially healthy enough and could expect problems in meeting its short term obligations.
TGT has a Quick ratio of 0.25. This is amonst the worse of the industry: TGT underperforms 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.25 |
3. Growth
3.1 Past
The earnings per share for TGT have decreased by -8.75% 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 -0.69%.
TGT shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.41% yearly.
EPS 1Y (TTM)-8.75%
EPS 3Y-13.2%
EPS 5Y6.72%
EPS Q2Q%-35.96%
Revenue 1Y (TTM)-0.69%
Revenue growth 3Y0.18%
Revenue growth 5Y6.41%
Sales Q2Q%-2.79%
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 3.55% on average per year.
The Revenue is expected to grow by 1.71% on average over the next years.
EPS Next Y-15.81%
EPS Next 2Y-4.18%
EPS Next 3Y-1.26%
EPS Next 5Y3.55%
Revenue Next Year-1.78%
Revenue Next 2Y0.28%
Revenue Next 3Y1.1%
Revenue Next 5Y1.71%
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 12.82, the valuation of TGT can be described as correct.
Based on the Price/Earnings ratio, TGT is valued a bit cheaper than 77.50% of the companies in the same industry.
TGT's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.30.
A Price/Forward Earnings ratio of 12.81 indicates a correct valuation of TGT.
Based on the Price/Forward Earnings ratio, TGT is valued cheaply inside the industry as 90.00% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of TGT to the average of the S&P500 Index (21.76), we can say TGT is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.82 | ||
| Fwd PE | 12.81 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TGT is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
TGT's Price/Free Cash Flow ratio is rather cheap when compared to the industry. TGT is cheaper than 82.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.4 | ||
| EV/EBITDA | 6.37 |
4.3 Compensation for Growth
TGT has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.91
EPS Next 2Y-4.18%
EPS Next 3Y-1.26%
5. Dividend
5.1 Amount
TGT has a Yearly Dividend Yield of 4.35%, which is a nice return.
Compared to an average industry Dividend Yield of 2.03, TGT pays a better dividend. On top of this TGT pays more dividend than 100.00% of the companies listed in the same industry.
TGT's Dividend Yield is rather good when compared to the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.35% |
5.2 History
On average, the dividend of TGT grows each year by 11.38%, which is quite nice.
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)11.38%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
48.94% of the earnings are spent on dividend by TGT. This is a bit on the high side, but may be sustainable.
The dividend of TGT is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP48.94%
EPS Next 2Y-4.18%
EPS Next 3Y-1.26%
104.24
-0.5 (-0.48%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners85.5%
Inst Owner Change0%
Ins Owners0.22%
Ins Owner Change5.83%
Market Cap47.36B
Analysts67.14
Price Target106.12 (1.8%)
Short Float %3.61%
Short Ratio2.28
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.35% |
Yearly Dividend4.46
Dividend Growth(5Y)11.38%
DP48.94%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-7.34%
Min EPS beat(2)-19.93%
Max EPS beat(2)5.26%
EPS beat(4)2
Avg EPS beat(4)-4.63%
Min EPS beat(4)-20.39%
Max EPS beat(4)16.53%
EPS beat(8)5
Avg EPS beat(8)8.85%
EPS beat(12)7
Avg EPS beat(12)3.79%
EPS beat(16)10
Avg EPS beat(16)2.25%
Revenue beat(2)0
Avg Revenue beat(2)-1.74%
Min Revenue beat(2)-2.72%
Max Revenue beat(2)-0.76%
Revenue beat(4)0
Avg Revenue beat(4)-1.34%
Min Revenue beat(4)-2.72%
Max Revenue beat(4)-0.02%
Revenue beat(8)0
Avg Revenue beat(8)-1.23%
Revenue beat(12)1
Avg Revenue beat(12)-0.91%
Revenue beat(16)3
Avg Revenue beat(16)-0.59%
PT rev (1m)-17.47%
PT rev (3m)-23.19%
EPS NQ rev (1m)1%
EPS NQ rev (3m)-21.99%
EPS NY rev (1m)-13.35%
EPS NY rev (3m)-19.14%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)-3.33%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-2.91%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.82 | ||
| Fwd PE | 12.81 | ||
| P/S | 0.45 | ||
| P/FCF | 13.4 | ||
| P/OCF | 7.24 | ||
| P/B | 3.17 | ||
| P/tB | 3.17 | ||
| EV/EBITDA | 6.37 |
EPS(TTM)8.13
EY7.8%
EPS(NY)8.13
Fwd EY7.8%
FCF(TTM)7.78
FCFY7.46%
OCF(TTM)14.4
OCFY13.81%
SpS233.03
BVpS32.9
TBVpS32.9
PEG (NY)N/A
PEG (5Y)1.91
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.45% | ||
| ROE | 28% | ||
| ROCE | 17.21% | ||
| ROIC | 13.42% | ||
| ROICexc | 14.54% | ||
| ROICexgc | 14.54% | ||
| OM | 6.05% | ||
| PM (TTM) | 3.95% | ||
| GM | 28.05% | ||
| FCFM | 3.34% |
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 Turnover1.88
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.96 | ||
| Debt/FCF | 4.38 | ||
| Debt/EBITDA | 1.52 | ||
| Cap/Depr | 98.59% | ||
| Cap/Sales | 2.84% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 69.2% | ||
| Profit Quality | 84.44% | ||
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.25 | ||
| Altman-Z | 3.13 |
F-Score5
WACC7.54%
ROIC/WACC1.78
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)-8.75%
EPS 3Y-13.2%
EPS 5Y6.72%
EPS Q2Q%-35.96%
EPS Next Y-15.81%
EPS Next 2Y-4.18%
EPS Next 3Y-1.26%
EPS Next 5Y3.55%
Revenue 1Y (TTM)-0.69%
Revenue growth 3Y0.18%
Revenue growth 5Y6.41%
Sales Q2Q%-2.79%
Revenue Next Year-1.78%
Revenue Next 2Y0.28%
Revenue Next 3Y1.1%
Revenue Next 5Y1.71%
EBIT growth 1Y10.84%
EBIT growth 3Y-14.56%
EBIT growth 5Y3.78%
EBIT Next Year45.77%
EBIT Next 3Y16.09%
EBIT Next 5Y17.69%
FCF growth 1Y612.5%
FCF growth 3Y-4.14%
FCF growth 5Y1.82%
OCF growth 1Y-2.04%
OCF growth 3Y-5.12%
OCF growth 5Y0.69%