Target (TGT) AI Stock Analysis

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Target

(NYSE:TGT)

60Neutral

Target's stock score reflects a mixed financial performance with strong balance sheet and cash flow indicators but challenges in income growth. The technical analysis shows bearish momentum, which is balanced by attractive valuation metrics. The earnings call provides a positive outlook with strategic investments, despite some immediate challenges. Overall, the stock remains a cautious buy, supported by its valuation and long-term growth strategy.

Positive Factors

Long-term Growth Prospects

Analyst recommends a BUY on Target with a target price of US$188 per share, based on its positive long-term growth prospects and efficient operating risk management.

Online Sales Growth

Similarweb data points to an acceleration in traffic to target.com, indicating potential growth in online sales.

Price Target

Analyst is raising the price target from $95 to $97 based on higher gross margins than previously forecast.

Negative Factors

Earnings Expectations

Analyst expects first quarter sales and EPS to miss consensus estimates, which could move the stock lower in the near-term.

Market Share Loss

Target is losing market share in core categories such as Home and Apparel to digital and off-price competitors.

Pricing Strategy

Target's pricing is higher than competitors, which may lead to reliance on promotional activities that could further impact margins.

Target (TGT) vs. S&P 500 (SPY)

Market Cap

$43.28B

Dividend Yield4.68%

Average Volume (3M)8.21M

Price to Earnings (P/E)10.8

Beta (1Y)0.64

Revenue Growth-0.79%

EPS Growth-0.90%

CountryUS

Employees440,000

SectorConsumer Defensive

Sector Strength67

IndustryDiscount Stores

Share Statistics

EPS (TTM)2.41

Shares Outstanding454,359,680

10 Day Avg. Volume6,633,475

30 Day Avg. Volume8,205,879

Financial Highlights & Ratios

PEG Ratio-1.76

Price to Book (P/B)3.00

Price to Sales (P/S)0.00

P/FCF Ratio9.79

Enterprise Value/Market Cap1.36

Enterprise Value/Revenue0.14

Enterprise Value/Gross Profit1.96

Enterprise Value/Ebitda1.62

Forecast

1Y Price Target

$120.50

Price Target Upside24.14% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering28

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 Key Performance Indicators (KPIs)

Any

Same Store Sales Growth

Same Store Sales Growth
Measures sales performance at existing locations, highlighting organic growth and customer loyalty without the influence of new store openings.

Chart InsightsTarget's same-store sales growth has shown a significant decline from 2020 to 2023, with a slight recovery in 2024. Despite recent challenges, including a sales dip in February and inventory issues, Target is investing heavily in its stores, supply chain, and technology to drive long-term growth. The company is focusing on enhancing its digital and physical presence, aiming for significant revenue growth over the next five years. The expansion of the Target Plus marketplace and increased Target Circle membership are key strategic moves to boost engagement and market share.

Data provided by:

Main Street Data

Target Financial Statement Overview

Summary

Target's financials reveal a mixed picture with stable balance sheet indicators and strong cash flow generation, tempered by challenges in income statement performance due to missing revenue data and declining profitability. The company's reduction in debt is a positive sign for future financial health.

Income Statement

Neutral

The income statement shows a decline in EBIT and net income from the previous year, indicating a potential challenge in maintaining profitability. Revenue data for the latest period is missing, preventing a comprehensive analysis of revenue trends. Margins are moderately stable, with EBIT margin showing a slight decrease.

Balance Sheet

Neutral

The balance sheet reflects a stable equity position with a strong equity ratio of 25.39%. However, the debt-to-equity ratio has improved significantly due to a substantial reduction in total debt, enhancing financial stability. Return on equity remains reasonably strong at 27.90%, indicating good profitability relative to equity.

Cash Flow

Neutral

Cash flow analysis indicates robust operating cash flow, with a notable free cash flow improvement. However, the absence of capital expenditure data limits a deeper understanding of cash flow dynamics. The operating cash flow to net income ratio is high, suggesting strong cash generation relative to reported earnings.

Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Breakdown
Income Statement		Total Revenue
106.57B	107.41B	109.12B	106.00B	93.56B
	Gross Profit
30.06B	29.68B	26.89B	31.04B	27.38B
	EBIT
5.57B	5.71B	3.85B	8.95B	6.54B
	EBITDA
5.78B	8.62B	6.66B	11.97B	9.09B
	Net Income Common Stockholders
4.09B	4.14B	2.78B	6.95B	4.37B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.76B	3.81B	2.23B	5.93B	8.51B
	Total Assets
57.77B	55.36B	53.34B	53.81B	51.25B
	Total Debt
19.88B	19.65B	18.78B	16.21B	14.90B
	Net Debt
15.11B	15.84B	16.55B	10.30B	6.39B
	Total Liabilities
43.10B	41.92B	42.10B	40.98B	36.81B
	Stockholders Equity
14.67B	13.43B	11.23B	12.83B	14.44B
Cash Flow		Free Cash Flow
4.48B	3.81B	-1.51B	5.08B	7.88B
	Operating Cash Flow
7.37B	8.62B	4.02B	8.63B	10.53B
	Investing Cash Flow
-2.86B	-4.76B	-5.50B	-3.15B	-2.59B
	Financing Cash Flow
-3.55B	-2.29B	-2.20B	-8.07B	-2.00B

Target Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price97.07

Price Trends

50DMA

98.74

Negative

100DMA

114.59

Negative

200DMA

128.61

Negative

Market Momentum

MACD

-0.52

Negative

RSI

50.95

Neutral

STOCH

37.60

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TGT, the sentiment is Neutral. The current price of 97.07 is above the 20-day moving average (MA) of 94.89, below the 50-day MA of 98.74, and below the 200-day MA of 128.61, indicating a neutral trend. The MACD of -0.52 indicates Negative momentum. The RSI at 50.95 is Neutral, neither overbought nor oversold. The STOCH value of 37.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
COST	78 Outperform	$439.93B	57.88	32.89%	0.47%	6.13%	12.14%
WMT	77 Outperform	$774.73B	40.26	22.80%	0.89%	5.07%	25.86%
BJ	75 Outperform	$14.32B	27.84	32.33%	―	2.67%	2.72%
DG	66 Neutral	$19.29B	17.15	15.89%	2.69%	4.96%	-32.41%
Sector *	64 Neutral	$8.59B	14.59	4.82%	173.89%	3.27%	2.73%
DLTR	61 Neutral	$18.09B	―	18.88%	―	-9.88%	-205.57%
TGT	60 Neutral	$43.28B	10.75	29.12%	4.68%	-0.79%	-0.90%

* Consumer Defensive Sector Average

Performance Comparison

TGT

Target

98.58

-56.06

-36.25%

COST

Costco

1,010.47

217.72

27.46%

Dollar General

92.99

-46.41

-33.29%

DLTR

Dollar Tree

86.51

-30.80

-26.26%

WMT

Walmart

96.35

32.36

50.57%

Bj's Wholesale Club Holdings

116.38

36.62

45.91%

Target Earnings Call Summary

Earnings Call Date:Mar 04, 2025

(Q4-2024)

% Change Since: -18.70%|

Next Earnings Date:May 21, 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.

Q4-2024 Updates

Positive Updates

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.

Negative Updates

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.