TARGET CORP (TGT) Stock Fundamental Analysis
USA - NYSE:TGT - US87612E1064 - Common Stock
85.53 USD
-3.57 (-4.01%)
85.4 USD
-0.13 (-0.15%)
Overall TGT gets a fundamental rating of 5 out of 10. We evaluated TGT against 39 industry peers in the Consumer Staples Distribution & Retail industry. TGT scores excellent on profitability, but there are concerns on its financial health. TGT is cheap, but on the other hand it scores bad on growth. 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.
TGT had positive earnings in each of the past 5 years.
In the past 5 years TGT always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of TGT (6.79%) is better than 71.79% of its industry peers.
Looking at the Return On Equity, with a value of 25.47%, TGT is in the better half of the industry, outperforming 76.92% of the companies in the same industry.
With an excellent Return On Invested Capital value of 13.47%, TGT belongs to the best of the industry, outperforming 92.31% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for TGT is above the industry average of 8.75%.
The last Return On Invested Capital (13.47%) 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 | 13.47% |
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 84.62% of its industry peers.
In the last couple of years the Profit Margin of TGT has declined.
The Operating Margin of TGT (6.32%) is better than 89.74% of its industry peers.
In the last couple of years the Operating Margin of TGT has declined.
TGT's Gross Margin of 27.79% is fine compared to the rest of the industry. TGT outperforms 61.54% of its industry peers.
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 | 6.32% | ||
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so TGT is creating value.
TGT has less shares outstanding than it did 1 year ago.
The number of shares outstanding for TGT has been reduced compared to 5 years ago.
TGT has a better debt/assets ratio than last year.
2.2 Solvency
TGT has an Altman-Z score of 2.96. This is not the best score and indicates that TGT is in the grey zone with still only limited risk for bankruptcy at the moment.
TGT has a Altman-Z score of 2.96. This is in the lower half of the industry: TGT underperforms 66.67% 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.
TGT has a Debt to FCF ratio (5.59) which is in line with its industry peers.
A Debt/Equity ratio of 0.99 indicates that TGT is somewhat dependend on debt financing.
TGT has a worse Debt to Equity ratio (0.99) than 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.99 | ||
| Debt/FCF | 5.59 | ||
| Altman-Z | 2.96 |
ROIC/WACC1.92
WACC7.03%
2.3 Liquidity
TGT has a Current Ratio of 0.99. 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 0.99 is on the low side compared to the rest of the industry. TGT is outperformed by 74.36% of its industry peers.
TGT has a Quick Ratio of 0.99. 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 0.32 is on the low side compared to the rest of the industry. TGT is outperformed by 74.36% of its industry peers.
| 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.
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 -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
TGT is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.40% yearly.
Based on estimates for the next years, TGT will show a small growth in Revenue. The Revenue will grow by 1.86% on average per year.
EPS Next Y-15.98%
EPS Next 2Y-4.51%
EPS Next 3Y-1.32%
EPS Next 5Y3.4%
Revenue Next Year-1.26%
Revenue Next 2Y0.33%
Revenue Next 3Y1.05%
Revenue Next 5Y1.86%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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 11.24, which indicates a very decent valuation of TGT.
Based on the Price/Earnings ratio, TGT is valued cheaply inside the industry as 82.05% of the companies are valued more expensively.
TGT's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.02.
TGT is valuated reasonably with a Price/Forward Earnings ratio of 10.59.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TGT indicates a rather cheap valuation: TGT is cheaper than 87.18% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.57, TGT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.24 | ||
| Fwd PE | 10.59 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TGT is valued cheaply inside the industry as 87.18% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, TGT is valued a bit cheaper than the industry average as 69.23% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.2 | ||
| EV/EBITDA | 5.23 |
4.3 Compensation for Growth
The decent profitability rating of TGT may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.67
EPS Next 2Y-4.51%
EPS Next 3Y-1.32%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.12%, TGT is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.00, 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 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.12% |
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.
TGT has decreased its dividend 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-4.51%
EPS Next 3Y-1.32%
85.53
-3.57 (-4.01%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners85.63%
Inst Owner Change-0.08%
Ins Owners0.22%
Ins Owner Change-0.44%
Market Cap38.86B
Analysts65.12
Price Target105.96 (23.89%)
Short Float %3.7%
Short Ratio2.19
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.12% |
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)-1.48%
PT rev (3m)-0.16%
EPS NQ rev (1m)-0.56%
EPS NQ rev (3m)3.07%
EPS NY rev (1m)-0.3%
EPS NY rev (3m)-0.03%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.45%
Revenue NY rev (1m)-0.05%
Revenue NY rev (3m)0.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.24 | ||
| Fwd PE | 10.59 | ||
| P/S | 0.37 | ||
| P/FCF | 13.2 | ||
| P/OCF | 6.09 | ||
| P/B | 2.52 | ||
| P/tB | 2.52 | ||
| EV/EBITDA | 5.23 |
EPS(TTM)7.61
EY8.9%
EPS(NY)8.08
Fwd EY9.45%
FCF(TTM)6.48
FCFY7.57%
OCF(TTM)14.05
OCFY16.43%
SpS232.48
BVpS33.93
TBVpS33.93
PEG (NY)N/A
PEG (5Y)1.67
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.79% | ||
| ROE | 25.47% | ||
| ROCE | 17.28% | ||
| ROIC | 13.47% | ||
| ROICexc | 15.17% | ||
| ROICexgc | 15.17% | ||
| OM | 6.32% | ||
| 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 | 1.57 | ||
| Cap/Depr | 111.83% | ||
| Cap/Sales | 3.26% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 65.48% | ||
| Profit Quality | 74.95% | ||
| Current Ratio | 0.99 | ||
| Quick Ratio | 0.32 | ||
| Altman-Z | 2.96 |
F-Score5
WACC7.03%
ROIC/WACC1.92
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-15.98%
EPS Next 2Y-4.51%
EPS Next 3Y-1.32%
EPS Next 5Y3.4%
Revenue 1Y (TTM)-1.55%
Revenue growth 3Y0.18%
Revenue growth 5Y6.41%
Sales Q2Q%-0.95%
Revenue Next Year-1.26%
Revenue Next 2Y0.33%
Revenue Next 3Y1.05%
Revenue Next 5Y1.86%
EBIT growth 1Y7.37%
EBIT growth 3Y-14.56%
EBIT growth 5Y3.78%
EBIT Next Year43.09%
EBIT Next 3Y15.7%
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%