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.