top of page

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.


Disclaimer: This is not direct financial advice, simply an opinion based on independent research.

bottom of page