Target (TGT) AI Stock Analysis

• Market Cap: $43.67B
• Dividend Yield: 4.59%
• Average Volume (3M): 6.85M
• Price to Earnings (P/E): 11.3
• Beta (1Y): 0.74
• Revenue Growth: -1.55%
• EPS Growth: -11.41%
• Country: US
• Employees: 440,000
• Sector: Consumer Defensive
• Sector Strength: 46
• Industry: Discount Stores
• EPS (TTM): 2.05
• Shares Outstanding: 454,365,900
• 10 Day Avg. Volume: 10,686,417
• 30 Day Avg. Volume: 6,853,552
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.40
• Enterprise Value/Revenue: 0.58
• Enterprise Value/Gross Profit: 2.27
• Enterprise Value/Ebitda: 7.25
• 1Y Price Target: $104.38
• Price Target Upside: 8.60% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 23

• Rating: 72 Outperform
• Price Target: $109.00 ▲(13.41% Upside)

Target's overall stock score reflects solid financial performance and attractive valuation, despite technical challenges and revenue growth concerns. Strategic initiatives in digital growth and operational improvements provide a positive outlook, though caution is warranted due to ongoing economic uncertainties.

Positive Factors

Earnings Outlook

The bottoming process for Target Corp's earnings revisions is closer to being finished, which is a positive indicator for the stock.

Product Innovation

Newness and style-forward product at a strong value continued to resonate the most with guests.

Risk Management

The use of AI and forward-positioned inventory by Target Corp is seen as a protective measure against downside risks, making the stock's risk/reward profile attractive.

Negative Factors

Competitive Pressure

Concerns remain about tariffs that could accelerate market share to value players like Costco, Walmart, and Amazon.

Leadership Transition

There is a risk to the investment thesis as the new CEO Michael Fiddelke has not yet made his impact on Target Corp's current earnings power and EBIT margin.

Market Perception

Mixed sentiment around the appointment of the new CEO due to lack of prior CEO experience.

Target Business Overview & Revenue Model

Company Description

Target Corporation (TGT) is a leading American retail company headquartered in Minneapolis, Minnesota. It operates a chain of discount department stores, offering a wide range of products including clothing, electronics, home goods, groceries, and health and beauty items. Target is known for its focus on providing high-quality products at affordable prices, alongside a strong emphasis on customer service and community engagement. The company also has a growing online presence, enhancing its ability to serve customers through e-commerce and a robust supply chain.

How the Company Makes Money

Target generates revenue primarily through the sale of merchandise across its stores and online platforms. The company operates in several key revenue streams, including its core retail operations, which consist of selling a variety of products in categories such as apparel, home essentials, electronics, and more. In addition to in-store sales, Target has a significant e-commerce business, which has grown in importance, particularly in recent years. Target also benefits from its private label brands, which typically offer higher margins compared to national brands. Furthermore, the company engages in partnerships with various brands and vendors to enhance its product offerings and attract a wider customer base. Target's loyalty program, Circle, encourages repeat purchases and customer retention, contributing to its overall sales growth.

Target Financial Statement Overview

Summary

Target's financial statements reflect solid profitability with a healthy gross profit margin of 25.7% and a net profit margin of 3.95%. Cash flow management is strong, with a robust free cash flow growth rate of 36.05%. However, challenges in revenue growth and a relatively low equity ratio suggest areas for improvement.

Income Statement

Target's income statement shows a mixed performance. The TTM data indicates a decline in revenue growth rate, which is a concern. However, the company maintains a healthy gross profit margin of 25.7% and a net profit margin of 3.95%. The EBIT and EBITDA margins are stable, reflecting operational efficiency. Overall, while revenue growth is a challenge, profitability remains solid.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio of 1.27, indicating manageable leverage. Return on equity is strong at 28.6%, showcasing effective use of shareholder funds. However, the equity ratio is relatively low, suggesting a higher reliance on debt financing. The balance sheet is stable but could benefit from a stronger equity position.

Cash Flow

Cash flow analysis shows a robust free cash flow growth rate of 36.05% in the TTM period, indicating improved cash generation. The operating cash flow to net income ratio is 0.34, and the free cash flow to net income ratio is 0.54, both suggesting efficient cash conversion. Overall, cash flow management appears strong, supporting financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	105.64B	106.57B	107.41B	109.12B	106.00B	93.56B
Gross Profit	26.86B	27.54B	27.26B	24.51B	28.70B	25.38B
EBITDA	8.43B	8.68B	8.62B	6.60B	11.97B	8.50B
Net Income	3.93B	4.09B	4.14B	2.78B	6.95B	4.37B
Balance Sheet
Total Assets	57.85B	57.77B	55.36B	53.34B	53.81B	51.25B
Cash, Cash Equivalents and Short-Term Investments	4.34B	4.76B	3.81B	2.23B	5.91B	8.51B
Total Debt	19.97B	19.88B	19.65B	19.07B	16.47B	15.11B
Total Liabilities	42.43B	43.10B	41.92B	42.10B	40.98B	36.81B
Stockholders Equity	15.42B	14.67B	13.43B	11.23B	12.83B	14.44B
Cash Flow
Free Cash Flow	4.81B	4.48B	3.81B	-1.51B	5.08B	7.88B
Operating Cash Flow	6.39B	7.37B	8.62B	4.02B	8.63B	10.53B
Investing Cash Flow	-3.41B	-2.86B	-4.76B	-5.50B	-3.15B	-2.59B
Financing Cash Flow	-2.13B	-3.55B	-2.29B	-2.20B	-8.07B	-2.00B

Target Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 96.11
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 96.11 is below the 20-day moving average (MA) of 101.42, below the 50-day MA of 101.05, and below the 200-day MA of 111.27, indicating a bearish trend. The MACD of -1.06 indicates Positive momentum. The RSI at 43.21 is Neutral, neither overbought nor oversold. The STOCH value of 22.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TGT.

Target Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
COST	80 Outperform	$417.57B	54.37	32.08%	0.52%	5.94%	9.31%
DG	74 Outperform	$24.32B	21.43	15.69%	2.12%	4.77%	-23.73%
WMT	73 Outperform	$766.52B	36.20	24.46%	0.95%	4.23%	38.05%
TGT	72 Outperform	$43.67B	11.33	26.32%	4.59%	-1.55%	-11.41%
BJ	66 Neutral	$12.70B	22.06	30.84%	―	2.48%	9.41%
Sector *	63 Neutral	$20.46B	14.47	-3.60%	3.13%	2.63%	-6.18%
DLTR	60 Neutral	$23.37B	―	19.25%	―	-20.46%	-202.26%

Target Corporate Events

Target Announces New CEO Amid Leadership Transition

On August 15, 2025, Target Corporation announced that Michael J. Fiddelke will become the new Chief Executive Officer effective February 1, 2026, following a succession planning process. Current CEO Brian C. Cornell will step down but continue as Executive Chair of the Board, marking a significant leadership transition for the company.

Target Shareholders Approve Key Proposals at Annual Meeting

On June 11, 2025, Target Corporation held its Annual Meeting of Shareholders where four key proposals were voted on. The shareholders elected twelve directors for a one-year term, ratified the appointment of Ernst & Young LLP as the independent auditor for fiscal 2025, and approved the executive compensation plan. However, a proposal requesting a report on the impact of affirmative action initiatives was not approved, reflecting limited shareholder support for this measure.

Target Closes $1 Billion Notes Sale for Growth

On June 10, 2025, Target Corporation successfully closed the sale of $1 billion in notes, split equally between 4.350% Notes due 2028 and 5.250% Notes due 2036. This financial move, executed in collaboration with major financial institutions, is part of Target’s strategy to strengthen its financial position and support future growth initiatives.