TARGET CORP (TGT) Stock Fundamental Analysis
NYSE:TGT - New York Stock Exchange, Inc. - US87612E1064 - Common Stock - Currency: USD
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 some minor concerns on its financial health. TGT is valued quite cheap, but it does not seem to be growing. Finally TGT also has an excellent dividend rating.
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.
In the past 5 years TGT has always been profitable.
In the past 5 years TGT always reported a positive cash flow from operatings.
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.
TGT's Return On Invested Capital of 13.42% is amongst the best of the industry. TGT outperforms 90.00% of its industry peers.
TGT had an Average Return On Invested Capital over the past 3 years of 11.15%. This is above the industry average of 8.23%.
The last Return On Invested Capital (13.42%) for TGT is above the 3 year average (11.15%), which is a sign of increasing profitability.
| 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 has a Profit Margin of 3.95%. This is amongst the best in the industry. TGT outperforms 87.50% of its industry peers.
In the last couple of years the Profit Margin of TGT has declined.
TGT's Operating Margin of 6.05% is amongst the best of the industry. TGT outperforms 90.00% of its industry peers.
In the last couple of years the Operating Margin of TGT has declined.
TGT has a better Gross Margin (28.05%) than 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), TGT 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.
The debt/assets ratio for TGT has been reduced compared to a year ago.
2.2 Solvency
TGT has an Altman-Z score of 3.11. This indicates that TGT is financially healthy and has little risk of bankruptcy at the moment.
With a Altman-Z score value of 3.11, TGT is not doing good in the industry: 62.50% of the companies in the same industry are doing better.
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 Debt to FCF ratio of 4.38. This is in the better half of the industry: TGT outperforms 62.50% of its industry peers.
A Debt/Equity ratio of 0.96 indicates that TGT is somewhat dependend on debt financing.
TGT has a Debt to Equity ratio of 0.96. This is in the lower half of the industry: TGT underperforms 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.96 | ||
| Debt/FCF | 4.38 | ||
| Altman-Z | 3.11 |
ROIC/WACC1.78
WACC7.55%
2.3 Liquidity
TGT has a Current 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's Current ratio of 0.94 is on the low side compared to the rest of the industry. TGT is outperformed by 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's Quick ratio of 0.25 is on the low side compared to the rest of the industry. TGT is outperformed by 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.
Measured over the past 5 years, TGT shows a small growth in Earnings Per Share. The EPS has been growing by 6.72% on average per year.
TGT shows a decrease in Revenue. In the last year, the revenue decreased by -0.69%.
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)-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
The Earnings Per Share is expected to grow by 3.55% on average over the next years.
Based on estimates for the next years, TGT will show a small growth in Revenue. The Revenue will grow by 1.71% on average per year.
EPS Next Y-15.95%
EPS Next 2Y-4.21%
EPS Next 3Y-0.42%
EPS Next 5Y3.55%
Revenue Next Year-1.74%
Revenue Next 2Y0.3%
Revenue Next 3Y1.03%
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
The Price/Earnings ratio is 12.75, which indicates a correct valuation of TGT.
Compared to the rest of the industry, the Price/Earnings ratio of TGT indicates a rather cheap valuation: TGT is cheaper than 82.50% of the companies listed in the same industry.
TGT's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.48.
Based on the Price/Forward Earnings ratio of 12.75, the valuation of TGT can be described as correct.
87.50% of the companies in the same industry are more expensive than TGT, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 36.52. TGT is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.75 | ||
| Fwd PE | 12.75 |
4.2 Price Multiples
TGT's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TGT is cheaper than 80.00% of the companies in the same industry.
82.50% of the companies in the same industry are more expensive than TGT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.33 | ||
| EV/EBITDA | 6.2 |
4.3 Compensation for Growth
The excellent profitability rating of TGT may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.9
EPS Next 2Y-4.21%
EPS Next 3Y-0.42%
5. Dividend
5.1 Amount
TGT has a Yearly Dividend Yield of 4.35%, which is a nice return.
TGT's Dividend Yield is rather good when compared to the industry average which is at 2.03. TGT pays more dividend than 100.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, TGT pays a better dividend.
| 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.
TGT has decreased its dividend recently.
Dividend Growth(5Y)11.38%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
TGT pays out 48.94% of its income as dividend. 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-4.21%
EPS Next 3Y-0.42%
103.65
+2.31 (+2.28%)
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 Cap47.10B
Analysts67.14
Price Target106.12 (2.38%)
Short Float %3.77%
Short Ratio2.44
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)-0.86%
PT rev (3m)-23.19%
EPS NQ rev (1m)1%
EPS NQ rev (3m)-21.06%
EPS NY rev (1m)-13.49%
EPS NY rev (3m)-19.27%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)-3.23%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)-2.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.75 | ||
| Fwd PE | 12.75 | ||
| P/S | 0.44 | ||
| P/FCF | 13.33 | ||
| P/OCF | 7.2 | ||
| P/B | 3.15 | ||
| P/tB | 3.15 | ||
| EV/EBITDA | 6.2 |
EPS(TTM)8.13
EY7.84%
EPS(NY)8.13
Fwd EY7.84%
FCF(TTM)7.78
FCFY7.5%
OCF(TTM)14.4
OCFY13.89%
SpS233.03
BVpS32.9
TBVpS32.9
PEG (NY)N/A
PEG (5Y)1.9
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 | 3.11 |
F-Score5
WACC7.55%
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-15.95%
EPS Next 2Y-4.21%
EPS Next 3Y-0.42%
EPS Next 5Y3.55%
Revenue 1Y (TTM)-0.69%
Revenue growth 3Y0.18%
Revenue growth 5Y6.41%
Sales Q2Q%-2.79%
Revenue Next Year-1.74%
Revenue Next 2Y0.3%
Revenue Next 3Y1.03%
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%