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. 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
TGT had positive earnings in the past year.
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
Looking at the Return On Assets, with a value of 7.45%, TGT belongs to the top of the industry, outperforming 85.00% of the companies in the same industry.
Looking at the Return On Equity, with a value of 28.00%, TGT is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
TGT has a better Return On Invested Capital (13.42%) than 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.
TGT's Profit Margin has declined in the last couple of years.
TGT has a better Operating Margin (6.05%) than 90.00% of its industry peers.
TGT's Operating Margin has declined in the last couple of years.
The Gross Margin of TGT (28.05%) is better than 65.00% 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 | 6.05% | ||
| 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 just above the Cost of Capital (WACC), so TGT is still creating some value.
Compared to 1 year ago, TGT has less shares outstanding
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.
TGT has a worse Altman-Z score (3.13) 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 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 | 3.13 |
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.
TGT has a worse Current ratio (0.94) than 72.50% of its industry peers.
A Quick Ratio of 0.25 indicates that TGT may have some problems paying 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
TGT shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.75%.
TGT shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.72% yearly.
Looking at the last year, TGT shows a decrease in Revenue. The Revenue has decreased by -0.69% in the last year.
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
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.
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
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
TGT is valuated correctly with a Price/Earnings ratio of 12.82.
Based on the Price/Earnings ratio, TGT is valued a bit cheaper than the industry average as 77.50% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.41, TGT is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 12.82, the valuation of TGT can be described as correct.
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 (35.19), we can say TGT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.82 | ||
| Fwd PE | 12.82 |
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.
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 | 6.34 |
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-4.21%
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 2.35, TGT pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.35% |
5.2 History
The dividend of TGT is nicely growing with an annual growth rate of 11.38%!
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.
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%
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)-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 | 12.82 | ||
| Fwd PE | 12.82 | ||
| P/S | 0.45 | ||
| P/FCF | 13.4 | ||
| P/OCF | 7.24 | ||
| P/B | 3.17 | ||
| P/tB | 3.17 | ||
| EV/EBITDA | 6.34 |
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-15.95%
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%