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Target (TGT)
NYSE:TGT
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Target
(NYSE:TGT)70Outperform
Positive Factors
Differentiation Strategy
Recent partnerships with brands like Champion and Warby Parker show that Target remains focused on ways to differentiate and drive its cheap chic image.
Digital Growth
Digital remains a bright spot with digital comps up 8.7%, and Target's marketplace is helping drive its e-Commerce and advertising business.
Negative Factors
Competitive Position
A potentially weaker competitive position relative to stronger 'needs-based' retailers such as BJ, WMT, and COST.
Margin Pressure
Pressure from increased costs in digital fulfillment and supply chain has been a significant detractor to operating margin.
Pricing Challenges
Target lags behind competitors on pricing, with a significant price gap compared to Costco, Amazon, and Walmart.
Target (TGT) vs. S&P 500 (SPY)
Market Cap
$53.67B
Dividend Yield3.69%
Average Volume (3M)6.03M
Price to Earnings (P/E)12.4
Beta (1Y)0.63
Revenue Growth0.64%
EPS Growth20.16%
CountryUS
Employees415,000
SectorConsumer Defensive
Sector Strength73
IndustryRetailers - Staples
Share Statistics
EPS (TTM)9.44
Shares Outstanding458,211,900
10 Day Avg. Volume8,414,261
30 Day Avg. Volume6,030,509
Financial Highlights & Ratios
PEG Ratio0.62
Price to Book (P/B)N/A
Price to Sales (P/S)0.51
Price to Cash Flow (P/CF)18.70
P/FCF Ratio164.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$139.52Price Target Upside19.11% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering26
Target Business Overview & Revenue Model
Company DescriptionTarget Corporation (TGT) is a leading American retail corporation headquartered in Minneapolis, Minnesota. The company operates a chain of large retail stores, offering a wide range of products, including apparel, home goods, electronics, groceries, and more. Target is known for its focus on providing a unique shopping experience with a blend of well-designed products at affordable prices. The company also offers various services such as same-day delivery, in-store pickup, and an expansive online shopping platform.
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 financial performance is marked by stable revenue and improved profitability margins. The balance sheet reflects a well-managed capital structure with strong equity returns, though debt levels warrant monitoring. Cash flows are robust, supporting liquidity and operational efficiency. Overall, Target demonstrates financial stability despite modest growth rates.Income Statement
Target has shown stable revenue with a slight increase in gross profit margin at 27.82% TTM. The net profit margin improved to 4.06% TTM, indicating better cost management and profitability. However, a modest revenue growth rate of 0.15% TTM suggests slower top-line expansion. EBIT and EBITDA margins are stable, reflecting consistent operational efficiency.78
Positive
Balance Sheet
The balance sheet is solid with a debt-to-equity ratio of 1.34, indicating moderate leverage. The equity ratio is at 24.76%, suggesting a healthy amount of equity financing. Return on Equity (ROE) improved to 30.15% TTM, showing strong shareholder returns. Nonetheless, the high debt level poses potential financial risk.75
Positive
Cash Flow
Cash flow statements reveal robust cash management with a strong operating cash flow to net income ratio of 1.69 TTM. Free cash flow growth rate is 19.13% TTM, demonstrating effective capital expenditure management. The free cash flow to net income ratio is 1.04 TTM, indicating a strong ability to generate cash relative to earnings.82
Very Positive
| Breakdown | ||
| TTM | Mar 2024 | |
|---|---|---|
| Income Statement | Total Revenue | |
| 107.57B | 107.41B | Gross Profit |
| 29.92B | 29.68B | EBIT |
| 5.97B | 5.71B | EBITDA |
| 6.84B | 8.62B | Net Income Common Stockholders |
| 4.37B | 4.14B | |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |
| 3.81B | 3.81B | Total Assets |
| 55.36B | 55.36B | Total Debt |
| 19.65B | 19.65B | Net Debt |
| 15.84B | 15.84B | Total Liabilities |
| 41.92B | 41.92B | Stockholders Equity |
| 13.43B | 13.43B | |
| Cash Flow | Free Cash Flow | |
| 4.54B | 3.81B | Operating Cash Flow |
| 7.37B | 8.62B | Investing Cash Flow |
| -2.79B | -4.76B | Financing Cash Flow |
| -3.05B | -2.29B |
Target Technical Analysis
Negative
117.14
Price Trends
132.19
Negative
137.34
Negative
141.61
Negative
Market Momentum
-3.56
Positive
29.83
Positive
17.81
Positive
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 117.14 is below the 20-day moving average (MA) of 127.64, below the 50-day MA of 132.19, and below the 200-day MA of 141.61, indicating a bearish trend. The MACD of -3.56 indicates Positive momentum. The RSI at 29.83 is Positive, neither overbought nor oversold. The STOCH value of 17.81 is Positive, 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 (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $2.16T | 36.91 | 20.72% | ― | 10.99% | 91.61% | |
78 Outperform | $460.27B | 60.89 | 30.98% | 0.44% | 5.35% | 16.22% | |
77 Outperform | $762.93B | 39.41 | 22.33% | 0.85% | 5.07% | 25.86% | |
70 Outperform | $53.67B | 12.41 | 30.16% | 3.69% | 0.64% | 20.16% | |
68 Neutral | $45.51B | 16.64 | 21.45% | 1.99% | 1.41% | 46.58% | |
67 Neutral | $18.54B | 14.82 | 41.21% | 4.33% | -3.02% | 1.21% | |
63 Neutral | $20.85B | 13.27 | -10.88% | 7.48% | 1.13% | 11.50% |
* Consumer Defensive Sector Average
Performance Comparison
TGT
Target
117.14
-46.40
-28.37%
AMZN
Amazon
203.80
29.68
17.05%
BBY
Best Buy Co
75.20
2.39
3.28%
COST
Costco
1,036.87
281.06
37.19%
KR
Kroger Company
63.18
14.76
30.48%
WMT
Walmart
94.97
35.64
60.07%
Target Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: -3.00% | 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.