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. TGT has an excellent profitability rating, but there are some minor concerns on its financial health. TGT is valued correctly, 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.
Each year in the past 5 years TGT has been profitable.
Each year in the past 5 years TGT had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 7.45%, TGT belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
TGT has a Return On Equity of 28.00%. This is in the better half 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 8.26%.
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
Looking at the Profit Margin, with a value of 3.95%, TGT belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
TGT's Profit Margin has declined in the last couple of years.
The Operating Margin of TGT (6.05%) is better than 90.00% of its industry peers.
TGT's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 28.05%, TGT is in the better half of the industry, outperforming 65.00% 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 | 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so TGT is creating value.
The number of shares outstanding for TGT has been reduced compared to 1 year ago.
Compared to 5 years ago, TGT has less shares outstanding
TGT has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.14 indicates that TGT is not in any danger for bankruptcy at the moment.
The Altman-Z score of TGT (3.14) is worse than 62.50% 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.
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 comparable to the rest of the industry: TGT outperforms 42.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.96 | ||
| Debt/FCF | 4.38 | ||
| Altman-Z | 3.14 |
ROIC/WACC1.81
WACC7.4%
2.3 Liquidity
A Current Ratio of 0.94 indicates that TGT may have some problems paying its short term obligations.
TGT has a Current ratio of 0.94. This is in the lower half of the industry: TGT underperforms 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 worse Quick ratio (0.25) than 77.50% 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.
Looking at the last year, TGT shows a decrease in Revenue. The Revenue has decreased by -0.69% in the last year.
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-15.95%
EPS Next 2Y-4.21%
EPS Next 3Y-0.42%
EPS Next 5Y3.55%
Revenue Next Year-1.73%
Revenue Next 2Y0.31%
Revenue Next 3Y1.04%
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
A Price/Earnings ratio of 12.96 indicates a correct valuation of TGT.
80.00% of the companies in the same industry are more expensive than TGT, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 26.48. TGT is valued rather cheaply when compared to this.
TGT is valuated correctly with a Price/Forward Earnings ratio of 12.96.
TGT's Price/Forward Earnings ratio is rather cheap when compared to the industry. TGT is cheaper than 85.00% of the companies in the same industry.
TGT is valuated cheaply when we compare the Price/Forward Earnings ratio to 34.04, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.96 | ||
| Fwd PE | 12.96 |
4.2 Price Multiples
77.50% of the companies in the same industry are more expensive than TGT, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TGT indicates a rather cheap valuation: TGT is cheaper than 82.50% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.55 | ||
| EV/EBITDA | 6.41 |
4.3 Compensation for Growth
The excellent profitability rating of TGT may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.93
EPS Next 2Y-4.21%
EPS Next 3Y-0.42%
5. Dividend
5.1 Amount
TGT has a Yearly Dividend Yield of 4.54%, which is a nice return.
Compared to an average industry Dividend Yield of 2.09, 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 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.54% |
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 48.94% 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.
DP48.94%
EPS Next 2Y-4.21%
EPS Next 3Y-0.42%
105.4
-0.27 (-0.26%)
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 Change1.01%
Ins Owners0.22%
Ins Owner Change5.84%
Market Cap47.89B
Analysts67.14
Price Target106.74 (1.27%)
Short Float %3.8%
Short Ratio2.59
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.54% |
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)0.58%
PT rev (3m)-17.48%
EPS NQ rev (1m)0.1%
EPS NQ rev (3m)-20.98%
EPS NY rev (1m)-0.16%
EPS NY rev (3m)-16.67%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)-3.22%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)-2.57%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.96 | ||
| Fwd PE | 12.96 | ||
| P/S | 0.45 | ||
| P/FCF | 13.55 | ||
| P/OCF | 7.32 | ||
| P/B | 3.2 | ||
| P/tB | 3.2 | ||
| EV/EBITDA | 6.41 |
EPS(TTM)8.13
EY7.71%
EPS(NY)8.13
Fwd EY7.71%
FCF(TTM)7.78
FCFY7.38%
OCF(TTM)14.4
OCFY13.66%
SpS233.03
BVpS32.9
TBVpS32.9
PEG (NY)N/A
PEG (5Y)1.93
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 | 3.14 |
F-Score5
WACC7.4%
ROIC/WACC1.81
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-1.73%
Revenue Next 2Y0.31%
Revenue Next 3Y1.04%
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%