Is Target a buy?
It’s time to break down a big box name. Here is the breakdown on $TGT, otherwise known as Target.
Current Price: $180.97
52/Wk High: $199.96
52/Wk Low: $90.17
Market Cap: $90.3 Billion
Dividend: $0.68 / 1.50% Yield
Read below for the breakdown!
Target ($TGT) is a general merchandise retailer with locations across the United States and over 350,000 employees throughout the company.
Taking a look at Target’s locations, 75% of the US population lives within ten miles of a Target location amongst their reach into all 50 US states.
Given major rotation in the market the consumer defensive sector has been in sell mode, causing $TGT to move over 6% to the downside in the past month.
Digging into the numbers, Target beat Q4 2021 expectations with an EPS of $2.67, better than the analysts EPS consensus estimate of $2.54. On a year over year basis, EPS increased by a strong 57.99%.
Revenues expanded as well, with total revenues increasing 21.1% year over year to $28.339 billion for the fourth quarter of the year.
As for income, Target reported a Q4 operating income level of $1.836 billion, representing a strong 53.2% increase over the previous operating income from Q4 2020.
Along with the strong numbers, costs of sales increased as well, which is expected. Cost of sales jumped to $20.485 billion, representing a 20.1% jump.
Shifting into the full year, Target reported FY 2021 revenues of $93.561 billion, representing a strong jump of 19.8% in revenues on a year over year basis.
Operating income was also impressive throughout 2021, totaling $6.539 billion, representing a massive 40.4% increase in operating income on a year over year basis.
Shifting into the balance sheet, the numbers are solid.
Total Debt: $12.680 Billion
Total Liabilities: $36.808 Billion
Total Assets: $51.248 Billion
Cash & Short Term Inv: $8.511 Billion
On a valuation basis Target does trade at a premium.
Price to Earnings: 20.82x
Forward Price to Earnings: 18.83x
Price to Sales: 0.96x
Price to Book: 6.24x
Price to Cash Flow: 11.09x
Management has done a solid job as well.
Return on Equity: 33.25%
Return on Assets: 9.29%
Return on Invested Capital: 14.70%
Given the numbers the analysts are bullish with a mean price target of $211.00/share, representing a 16.54% gain.
The high price target is $260.00/share, representing a 43.61% upside while the low price target is $185.00/share, representing a 2.18% gain.
The big money is quite involved as well, with 76.69% of Target being owned by institutions. Top holders include The Vanguard Group, State Street Global Advisors, and BlackRock Institutional Trust.
On a technical basis, Target could be flashing opportunity. According to the six-month charts the MACD recently crossed back to the upside with minimal momentum around -2.3395.
The six-month charts are also indicating an RSI of 48.42 and CCI of -25.3716, both of which are on the lower end.
In short, Target ($TGT) is a rock solid company with consistent growth, a loyal customer base, and a huge footprint.
EAT - SLEEP - PROFIT
Disclaimer: This is not direct financial advice, simply an opinion based on independent research.