TARGET CORP (TGT)
US87612E1064 - Common Stock
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 scores excellent on profitability, but there are some minor concerns on its financial health. TGT has a decent growth rate and is not valued too expensively.
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.
TGT had positive earnings in each of the past 5 years.
TGT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
TGT has a Return On Assets of 7.48%. This is amongst the best in the industry. TGT outperforms 85.00% of its industry peers.
The Return On Equity of TGT (30.81%) is better than 87.50% of its industry peers.
Looking at the Return On Invested Capital, with a value of 12.84%, TGT belongs to the top of the industry, outperforming 87.50% 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 below the industry average of 47.62%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.48% | ||
| ROE | 30.81% | ||
| ROIC | 12.84% |
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
With an excellent Profit Margin value of 3.85%, TGT belongs to the best of the industry, outperforming 92.50% of the companies in the same industry.
In the last couple of years the Profit Margin of TGT has remained more or less at the same level.
The Operating Margin of TGT (5.41%) is better than 95.00% of its industry peers.
TGT's Operating Margin has been stable in the last couple of years.
TGT has a Gross Margin of 27.63%. This is in the better half of the industry: TGT outperforms 67.50% 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 | 5.41% | ||
| PM (TTM) | 3.85% | ||
| GM | 27.63% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so TGT is creating value.
TGT has more shares outstanding than it did 1 year ago.
TGT has less shares outstanding than it did 5 years ago.
TGT has a better debt/assets ratio than last year.
2.2 Solvency
TGT has an Altman-Z score of 3.46. This indicates that TGT is financially healthy and has little risk of bankruptcy at the moment.
TGT has a Altman-Z score (3.46) which is in line with its industry peers.
The Debt to FCF ratio of TGT is 4.20, which is a neutral value as it means it would take TGT, 4.20 years of fcf income to pay off all of its debts.
TGT's Debt to FCF ratio of 4.20 is fine compared to the rest of the industry. TGT outperforms 70.00% of its industry peers.
TGT has a Debt/Equity ratio of 1.11. This is a high value indicating a heavy dependency on external financing.
TGT's Debt to Equity ratio of 1.11 is on the low side compared to the rest of the industry. TGT is outperformed by 77.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.11 | ||
| Debt/FCF | 4.2 | ||
| Altman-Z | 3.46 |
ROIC/WACC1.59
WACC8.06%
2.3 Liquidity
TGT has a Current Ratio of 0.91. 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 Current ratio of 0.91. This is in the lower half of the industry: TGT underperforms 70.00% of its industry peers.
A Quick Ratio of 0.29 indicates that TGT may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.29, TGT is doing worse than 82.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.29 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 51.79% 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.
TGT shows a decrease in Revenue. In the last year, the revenue decreased by -1.57%.
TGT shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.35% yearly.
EPS 1Y (TTM)51.79%
EPS 3Y-1.8%
EPS 5Y10.54%
EPS Q2Q%-0.98%
Revenue 1Y (TTM)-1.57%
Revenue growth 3Y4.71%
Revenue growth 5Y7.35%
Sales Q2Q%-3.12%
3.2 Future
The Earnings Per Share is expected to grow by 8.32% 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 2.94% yearly.
EPS Next Y6.63%
EPS Next 2Y9.07%
EPS Next 3Y8.63%
EPS Next 5Y8.32%
Revenue Next Year-0.11%
Revenue Next 2Y1.78%
Revenue Next 3Y2.57%
Revenue Next 5Y2.94%
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 17.53 indicates a rather expensive valuation of TGT.
Based on the Price/Earnings ratio, TGT is valued a bit cheaper than the industry average as 72.50% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 28.05. TGT is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 14.70 indicates a correct valuation of TGT.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TGT indicates a somewhat cheap valuation: TGT is cheaper than 75.00% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of TGT to the average of the S&P500 Index (20.07), we can say TGT is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.53 | ||
| Fwd PE | 14.7 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TGT is on the same level as its industry peers.
TGT's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. TGT is cheaper than 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.94 | ||
| EV/EBITDA | 9.81 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates TGT does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of TGT may justify a higher PE ratio.
PEG (NY)2.64
PEG (5Y)1.66
EPS Next 2Y9.07%
EPS Next 3Y8.63%
5. Dividend
5.1 Amount
TGT has a Yearly Dividend Yield of 2.94%.
Compared to an average industry Dividend Yield of 2.56, TGT pays a better dividend. On top of this TGT pays more dividend than 87.50% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, TGT pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.94% |
5.2 History
On average, the dividend of TGT grows each year by 11.61%, which is quite nice.
TGT has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)11.61%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
48.60% of the earnings are spent on dividend by TGT. 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.
DP48.6%
EPS Next 2Y9.07%
EPS Next 3Y8.63%
TARGET CORP
NYSE:TGT (5/31/2024, 7:09:02 PM)
After market: 156.2 +0.04 (+0.03%)156.16
+6.29 (+4.2%)
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 Cap72.24B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.94% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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EPS beat(16)
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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 | 17.53 | ||
| Fwd PE | 14.7 | ||
| 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)2.64
PEG (5Y)1.66
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.48% | ||
| ROE | 30.81% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 5.41% | ||
| PM (TTM) | 3.85% | ||
| GM | 27.63% | ||
| 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 Turnover1.94
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.11 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.29 | ||
| 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)51.79%
EPS 3Y-1.8%
EPS 5Y
EPS Q2Q%
EPS Next Y6.63%
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