TARGET CORP (TGT)
US87612E1064 - Common Stock
We assign a fundamental rating of 6 out of 10 to TGT. TGT was compared to 41 industry peers in the Consumer Staples Distribution & Retail industry. TGT scores excellent on profitability, but 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
In the past year TGT was profitable.
TGT had a positive operating cash flow in the past year.
In the past 5 years TGT has always been profitable.
Each year in the past 5 years TGT had a positive operating cash flow.
1.2 Ratios
TGT's Return On Assets of 8.01% is amongst the best of the industry. TGT outperforms 87.80% of its industry peers.
TGT has a Return On Equity of 31.10%. This is amongst the best in the industry. TGT outperforms 87.80% of its industry peers.
With an excellent Return On Invested Capital value of 13.76%, TGT belongs to the best of the industry, outperforming 87.80% of the companies in the same industry.
TGT had an Average Return On Invested Capital over the past 3 years of 14.84%. This is significantly above the industry average of 9.18%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.01% | ||
| ROE | 31.1% | ||
| ROIC | 13.76% |
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
The Profit Margin of TGT (4.18%) is better than 92.68% of its industry peers.
TGT's Profit Margin has been stable in the last couple of years.
With an excellent Operating Margin value of 5.79%, TGT belongs to the best of the industry, outperforming 90.24% 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.
Looking at the Gross Margin, with a value of 28.43%, TGT is in the better half of the industry, outperforming 70.73% of the companies in the same industry.
TGT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.79% | ||
| PM (TTM) | 4.18% | ||
| GM | 28.43% |
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.
Compared to 1 year ago, TGT has more shares outstanding
The number of shares outstanding for TGT has been reduced compared to 5 years ago.
The debt/assets ratio for TGT has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.25 indicates that TGT is not in any danger for bankruptcy at the moment.
TGT's Altman-Z score of 3.25 is in line compared to the rest of the industry. TGT outperforms 41.46% of its industry peers.
The Debt to FCF ratio of TGT is 2.90, which is a good value as it means it would take TGT, 2.90 years of fcf income to pay off all of its debts.
TGT's Debt to FCF ratio of 2.90 is fine compared to the rest of the industry. TGT outperforms 78.05% of its industry peers.
TGT has a Debt/Equity ratio of 0.95. This is a neutral value indicating TGT is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.95, TGT is doing worse than 65.85% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.95 | ||
| Debt/FCF | 2.9 | ||
| Altman-Z | 3.25 |
ROIC/WACC1.79
WACC7.69%
2.3 Liquidity
A Current Ratio of 0.90 indicates that TGT may have some problems paying its short term obligations.
With a Current ratio value of 0.90, TGT is not doing good in the industry: 65.85% of the companies in the same industry are doing better.
A Quick Ratio of 0.27 indicates that TGT may have some problems paying its short term obligations.
TGT has a Quick ratio of 0.27. This is in the lower half of the industry: TGT underperforms 78.05% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.27 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 20.28% over the past year.
Measured over the past years, TGT shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.54% on average per year.
Looking at the last year, TGT shows a decrease in Revenue. The Revenue has decreased by -1.57% in the last year.
TGT shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.35% yearly.
EPS 1Y (TTM)20.28%
EPS 3Y-1.8%
EPS 5Y10.54%
EPS Q2Q%-11.9%
Revenue 1Y (TTM)-1.57%
Revenue growth 3Y4.71%
Revenue growth 5Y7.35%
Sales Q2Q%1.06%
3.2 Future
The Earnings Per Share is expected to grow by 8.01% on average over the next years. This is quite good.
TGT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.13% yearly.
EPS Next Y8.14%
EPS Next 2Y9.15%
EPS Next 3Y9.26%
EPS Next 5Y8.01%
Revenue Next Year-0.43%
Revenue Next 2Y1.38%
Revenue Next 3Y2.09%
Revenue Next 5Y3.13%
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
The Price/Earnings ratio is 12.91, which indicates a correct valuation of TGT.
Based on the Price/Earnings ratio, TGT is valued a bit cheaper than 78.05% 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 28.65.
TGT is valuated reasonably with a Price/Forward Earnings ratio of 11.44.
Based on the Price/Forward Earnings ratio, TGT is valued a bit cheaper than 78.05% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.56, TGT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.91 | ||
| Fwd PE | 11.44 |
4.2 Price Multiples
TGT's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, TGT is valued cheaply inside the industry as 85.37% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.64 | ||
| EV/EBITDA | 7.43 |
4.3 Compensation for Growth
TGT's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of TGT may justify a higher PE ratio.
PEG (NY)1.59
PEG (5Y)1.22
EPS Next 2Y9.15%
EPS Next 3Y9.26%
5. Dividend
5.1 Amount
TGT has a Yearly Dividend Yield of 3.68%.
In the last 3 months the price of TGT has falen by -23.21%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
TGT's Dividend Yield is rather good when compared to the industry average which is at 2.55. TGT pays more dividend than 95.12% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.23, TGT pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.68% |
5.2 History
The dividend of TGT is nicely growing with an annual growth rate of 11.60%!
TGT has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)11.6%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
TGT pays out 45.29% 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.
DP45.29%
EPS Next 2Y9.15%
EPS Next 3Y9.26%
TARGET CORP
NYSE:TGT (11/20/2024, 8:04:00 PM)
Premarket: 122.15 +0.43 (+0.35%)121.72
-34.28 (-21.97%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap56.07B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.68% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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Revenue beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.91 | ||
| Fwd PE | 11.44 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.59
PEG (5Y)1.22
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.01% | ||
| ROE | 31.1% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 5.79% | ||
| PM (TTM) | 4.18% | ||
| GM | 28.43% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.92
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.95 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.27 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)20.28%
EPS 3Y-1.8%
EPS 5Y
EPS Q2Q%
EPS Next Y8.14%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-1.57%
Revenue growth 3Y4.71%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y