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Target (TGT)
NYSE:TGT
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Target
(NYSE:TGT)
54Neutral
Positive Factors
E-commerce Performance
Sales were strongest in digital with a 4Q comp of +8.7% (with over 25% growth in same-day delivery through Target Circle 360 y/y).
Sales Growth
Comparable sales grew 1.5%, driven by stronger-than-expected holiday season traffic recovery.
Negative Factors
Economic Challenges
Recent challenges such as inflationary pressure and slower move of inventory given the economic pressure, could have certain impacts on Target’s margins.
Guidance and Forecast
Management indicated that 1Q will be pressured and will no longer give quarterly guidance due to volatility.
Target (TGT) vs. S&P 500 (SPY)
Market Cap
$43.61B
Dividend Yield4.66%
Average Volume (3M)9.21M
Price to Earnings (P/E)10.8
Beta (1Y)0.70
Revenue Growth-0.79%
EPS Growth-0.90%
CountryUS
Employees440,000
SectorConsumer Defensive
Sector Strength93
IndustryDiscount Stores
Share Statistics
EPS (TTM)8.86
Shares Outstanding455,576,480
10 Day Avg. Volume8,977,180
30 Day Avg. Volume9,211,622
Financial Highlights & Ratios
PEG Ratio0.62
Price to Book (P/B)N/A
Price to Sales (P/S)0.44
Price to Cash Flow (P/CF)3.60
P/FCF Ratio3.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$137.85Price Target Upside44.01% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering28
Target Business Overview & Revenue Model
Company DescriptionTarget Corporation operates as a general merchandise retailer in the United States. The company offers food assortments, including perishables, dry grocery, dairy, and frozen items; apparel, accessories, home décor products, electronics, toys, seasonal offerings, food, and other merchandise; and beauty and household essentials. It also provides in-store amenities, such as Target Café, Target Optical, Starbucks, and other food service offerings. The company sells its products through its stores; and digital channels, including Target.com. As of March 09, 2022, the company operated approximately 2,000 stores. Target Corporation was incorporated in 1902 and is headquartered in Minneapolis, Minnesota.
How the Company Makes MoneyTarget makes money primarily through the sale of products across its vast network of retail stores and online platforms. The key revenue streams include the sales of apparel and accessories, home furnishing and decor, electronics, food and beverages, and essentials like health and beauty products. Additionally, Target earns money through its private-label brands, which offer higher margins compared to national brands. The company also benefits from strategic partnerships and collaborations with designers and brands, enhancing its product offerings and driving customer traffic. Revenue is further supported by supplemental services such as Target's credit card program, which offers loyalty rewards and financing options to customers, generating additional income through interest and fees.
Target Financial Statement Overview
Summary
Target's financials reveal a mixed picture with stable balance sheet indicators and strong cash flow generation, tempered by challenges in income statement performance due to missing revenue data and declining profitability. The company's reduction in debt is a positive sign for future financial health.Income Statement
The income statement shows a decline in EBIT and net income from the previous year, indicating a potential challenge in maintaining profitability. Revenue data for the latest period is missing, preventing a comprehensive analysis of revenue trends. Margins are moderately stable, with EBIT margin showing a slight decrease.45
Neutral
Balance Sheet
The balance sheet reflects a stable equity position with a strong equity ratio of 25.39%. However, the debt-to-equity ratio has improved significantly due to a substantial reduction in total debt, enhancing financial stability. Return on equity remains reasonably strong at 27.90%, indicating good profitability relative to equity.60
Neutral
Cash Flow
Cash flow analysis indicates robust operating cash flow, with a notable free cash flow improvement. However, the absence of capital expenditure data limits a deeper understanding of cash flow dynamics. The operating cash flow to net income ratio is high, suggesting strong cash generation relative to reported earnings.55
Neutral
| Breakdown | ||||
| Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 106.57B | 107.41B | 109.12B | 106.00B | 93.56B | Gross Profit |
| 30.06B | 29.68B | 26.89B | 31.04B | 27.38B | EBIT |
| 5.57B | 5.71B | 3.85B | 8.95B | 6.54B | EBITDA |
| 5.57B | 8.62B | 6.66B | 11.97B | 9.09B | Net Income Common Stockholders |
| 4.09B | 4.14B | 2.78B | 6.95B | 4.37B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.76B | 3.81B | 2.23B | 5.93B | 8.51B | Total Assets |
| 57.77B | 55.36B | 53.34B | 53.81B | 51.25B | Total Debt |
| 5.22B | 19.65B | 18.78B | 16.21B | 14.90B | Net Debt |
| 456.00M | 15.84B | 16.55B | 10.30B | 6.39B | Total Liabilities |
| 43.10B | 41.92B | 42.10B | 40.98B | 36.81B | Stockholders Equity |
| 14.67B | 13.43B | 11.23B | 12.83B | 14.44B |
| Cash Flow | Free Cash Flow | |||
| 7.37B | 3.81B | -1.51B | 5.08B | 7.88B | Operating Cash Flow |
| 7.37B | 8.62B | 4.02B | 8.63B | 10.53B | Investing Cash Flow |
| -2.86B | -4.76B | -5.50B | -3.15B | -2.59B | Financing Cash Flow |
| -3.55B | -2.29B | -2.20B | -8.07B | -2.00B |
Target Technical Analysis
Negative
95.72
Price Trends
119.31
Negative
127.30
Negative
137.05
Negative
Market Momentum
-4.83
Negative
33.13
Neutral
40.44
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TGT, the sentiment is Negative. The current price of 95.72 is below the 20-day moving average (MA) of 105.06, below the 50-day MA of 119.31, and below the 200-day MA of 137.05, indicating a bearish trend. The MACD of -4.83 indicates Negative momentum. The RSI at 33.13 is Neutral, neither overbought nor oversold. The STOCH value of 40.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TGT.
Target Risk Analysis
Target disclosed 17 risk factors in its most recent earnings report. Target reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Target Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $15.20B | 28.85 | 32.33% | ― | 2.67% | 2.72% | |
73 Outperform | $699.55B | 36.28 | 22.23% | 1.03% | 5.07% | 25.86% | |
71 Outperform | $406.63B | 53.50 | 32.89% | 0.51% | 6.13% | 12.14% | |
65 Neutral | $20.37B | 18.11 | 15.89% | 2.55% | 4.96% | -32.41% | |
62 Neutral | $20.22B | 14.00 | -15.99% | 3.22% | 1.17% | 3.32% | |
57 Neutral | $14.53B | ― | 18.88% | ― | -9.88% | -205.57% | |
54 Neutral | $43.61B | 10.81 | 29.12% | 4.66% | -0.79% | -0.90% |
* Consumer Defensive Sector Average
Performance Comparison
TGT
Target
95.72
-68.91
-41.86%
COST
Costco
916.48
208.54
29.46%
DG
Dollar General
92.62
-61.11
-39.75%
DLTR
Dollar Tree
67.55
-60.67
-47.32%
WMT
Walmart
83.19
24.08
40.74%
BJ
Bj's Wholesale Club Holdings
115.41
38.88
50.80%
Target Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: -20.74% | Next Earnings Date: May 14, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements, such as record guest trips, strong digital sales growth, and a robust expansion in the Target Plus marketplace. However, it also acknowledged challenges including sales declines in February, tariff uncertainties, and inventory management issues. Despite these challenges, the company expressed confidence in its strategic investments and growth prospects.Highlights
Record-Breaking Guest Trips
Target saw 350 million more guest trips compared to 2019, indicating strong customer engagement and loyalty.
Significant Growth in Beauty Sales
Target's Beauty segment saw nearly 7% sales growth and gained market share, highlighting effective category management.
Expansion of Target Plus Marketplace
Target Plus marketplace reached over $1 billion in GMV and is expected to grow to $5 billion in the next 5 years, indicating strong growth potential.
Strong Digital Sales Performance
Target's digital business grew nearly 9% in Q4, powered by innovations like Drive Up and same-day delivery.
Growing Target Circle Membership
Target Circle membership increased significantly, attracting 13 million new members, enhancing customer loyalty and engagement.
Positive Trends in Apparel and Home
Apparel comp sales were up by more than 3% in Q4, and improvements were noted in Home category performance.
Lowlights
Sales Decline in February
Target experienced a sales decline in February due to a mix of factors including economic uncertainty affecting discretionary spending.
Impact of Tariff Uncertainty
Tariff uncertainty presents challenges and requires maintaining a larger-than-normal cushion on the balance sheet.
Volatility in Consumer Spending
Target noted volatility in consumer spending, particularly in discretionary categories, impacting predictability and planning.
Inventory Management Challenges
Ending inventory at cost was up over 7% from last year due to receipt timing volatility and other factors.
Company Guidance
In the 2025 Financial Community Meeting, Target provided guidance for its fiscal year 2024, focusing on its ambition to drive significant growth over the next five years. The company plans to invest $4 billion to $5 billion this year in stores, supply chain, and technology, aiming to boost guest engagement and sustain its unique position in retail. Target aspires to achieve more than $15 billion in revenue growth by maintaining or increasing its market share across its categories, driven by a strategy that blends physical, digital, and social experiences. The company also highlighted its progress in enhancing its Target Plus marketplace, which it expects to grow to $5 billion in gross merchandise value over the next five years. Additionally, Target plans to capitalize on its loyalty program, Target Circle, which added 13 million members last year, and its media business, Roundel, which generated nearly $2 billion in value. Despite current challenges, such as a sales decline in February due to economic uncertainty, Target remains focused on its long-term strategy, expecting to deliver low to mid-single-digit topline growth and mid to high single-digit annual EPS growth over several years.Target Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Target’s New Credit Agreement Boosts Financial Flexibility
Positive
Oct 15, 2024
Target Corporation has signed a new 364-Day Credit Agreement with major banks, securing up to $1.0 billion, potentially increasing by $500 million, with flexible borrowing options based on interest rates linked to Target’s debt ratings. This agreement provides Target with greater financial flexibility and replaces a previous agreement set to expire soon. Key terms include financial covenants and default clauses, highlighting the importance of strategic financial management for investors.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.