Intro:

When it comes to the stock market, there's one thing we can all agree on: it can be pretty dry and serious. So, if you're looking for a little levity while still getting your daily dose of financial analysis, then look no further! Today we're taking a closer look at Target Corporation TGT. Let's dive in:

Current 10/31/2022 7/31/2022 4/30/2022 1/31/2022

Market Cap (intraday) 76.28B 75.60B 75.76B 106.02B 103.88B

Enterprise Value 94.36B 92.13B 91.70B 116.58B 113.39B

Trailing P/E 22.64 18.60 13.51 16.22 16.21

Forward P/E 16.81 13.37 17.18 15.65 16.64

PEG Ratio (5 yr) 3.53 2.47 3.30 1.76 1.40

Price/Sales (ttm) 0.71 0.72 0.74 1.06 1.06

Price/Book (mrq) 6.92 7.14 6.98 8.27 7.53

Enterprise Value/Revenue 0.87 3.47 3.52 4.63 3.66

Enterprise Value/EBITDA 12.52 53.91 93.66 57.14 40.34

These stock stats provide some key financial ratios for the company over the past few months. Here are some observations:

• Market Cap: The market capitalization of the company has fluctuated over the past few months, but has been relatively stable between July 2022 and October 2022.

• Enterprise Value: The enterprise value of the company has also fluctuated, but generally declined over the past few months. This indicates that the market values the company's equity more than its debt and other liabilities.

• Trailing P/E: The price-to-earnings ratio based on the last 12 months of earnings has been trending downwards, which can suggest a lower valuation or lower earnings growth.

• Forward P/E: The price-to-earnings ratio based on estimated earnings for the next 12 months is also trending downwards, which suggests a more positive outlook for future earnings.

• PEG Ratio: The PEG ratio is high, indicating that the stock is relatively expensive compared to its expected earnings growth over the next five years.

• Price/Sales: The price-to-sales ratio has been relatively stable over the past few months, indicating that the market has been valuing the company's revenue consistently.

• Price/Book: The price-to-book ratio has fluctuated over the past few months, but has generally been in the range of 6-8, which suggests that the market values the company's equity at a moderate premium to its book value.

• Enterprise Value/Revenue: The enterprise value-to-revenue ratio has been trending downwards, which suggests that the market is valuing the company's revenue at a lower multiple than before.

• Enterprise Value/EBITDA: The enterprise value-to-EBITDA ratio has fluctuated widely, indicating that the market values the company's EBITDA (earnings before interest, taxes, depreciation, and amortization) at different multiples at different times.

Overall, the trends in the stock stats suggest that the market is uncertain about the company's future prospects and is valuing its various financial metrics at different multiples at different times

Stock Price History:

Beta (5Y Monthly) 1.04

52-Week Change -16.42%

S&P500 52-Week Change -9.23%

52 Week High 254.87

52 Week Low 137.16

50-Day Moving Average 161.15

200-Day Moving Average 160.73

From the stock price history provided, there are a few observations that can be made, but it's difficult to draw a clear conclusion or consensus without additional context or analysis. Here are a few points to consider:

• The beta of 1.04 indicates that the stock is slightly more volatile than the overall market.

• The 52-week change of -16.42% suggests that the stock has declined in value over the past year.

• The S&P500 52-week change of -9.23% indicates that the broader market has also experienced a decline over the past year, although to a lesser extent than the stock in question.

• The 52-week high and low prices of 254.87 and 137.16, respectively, suggest that the stock has experienced a significant range of price fluctuations over the past year.

• The 50-day moving average of 161.15 and the 200-day moving average of 160.73 suggest that the stock has been relatively stable in the short term, but has experienced some volatility over the longer term.

Based on these observations, it's possible to speculate that the stock has faced some challenges or headwinds over the past year, given its decline in value and the wider market trend. However, it's difficult to draw any firm conclusion or consensus without further analysis of the company's financial performance, industry trends, and other relevant factors that could influence the stock price. It's also worth noting that past performance is not necessarily indicative of future results and that investing always carries risk.

At the current trading price of $166.96, it is clear that the stock has recovered somewhat from its 52-week low of $137.16, although it is still below its 52-week high of $254.87. The current price may also impact the interpretation of the moving averages, which suggest that the stock has been relatively stable in the short and long term. Given the recent recovery in price, it's possible to speculate that the market may be more optimistic about the stock's future prospects.

Profitability:

Profit Margin 3.17%

Operating Margin (ttm) 4.49%

Return on Assets (ttm) 5.55%

Return on Equity (ttm) 27.78%

Revenue (ttm) 108.72B

Revenue Per Share (ttm) 233.36

Quarterly Revenue Growth (yoy) 3.40%

Gross Profit (ttm) 31.04B

EBITDA 7.58B

Net Income Avi to Common (ttm) 3.45B

Diluted EPS (ttm) 7.31

Quarterly Earnings Growth (yoy) -52.20%

Total Cash (mrq) 1.01B

Total Cash Per Share (mrq) 2.19

Total Debt (mrq) 19.47B

Total Debt/Equity (mrq) 176.70

Current Ratio (mrq) 0.86

Book Value Per Share (mrq) 23.94

Operating Cash Flow (ttm) 3.58B

Levered Free Cash Flow (ttm) -2.91B

The financials provided reveal some key metrics on the profitability, management effectiveness, income statement, balance sheet, and cash flow of the company in question. Here are some observations:

• Profit Margin: The profit margin is 3.17%, which means that the company retains $0.0317 in profit for every dollar of sales.

• Operating Margin: The operating margin is 4.49%, which means that the company retains $0.0449 in operating profit for every dollar of sales.

• Return on Assets: The return on assets is 5.55%, which means that the company generates $0.0555 in earnings for every dollar of assets it holds.

• Return on Equity: The return on equity is 27.78%, which means that the company generates $0.2778 in earnings for every dollar of equity it holds.

• Revenue: The revenue over the trailing twelve months is $108.72B, and the revenue per share is $233.36.

• Quarterly Revenue Growth: The quarterly revenue growth (YoY) is 3.40%, which suggests that the company has been experiencing modest growth in revenue.

• Gross Profit: The gross profit over the trailing twelve months is $31.04B.

• EBITDA: The EBITDA is $7.58B.

• Net Income: The net income available to common shareholders over the trailing twelve months is $3.45B.

• Diluted EPS: The diluted earnings per share over the trailing twelve months is $7.31.

• Quarterly Earnings Growth: The quarterly earnings growth (YoY) is -52.20%, which suggests that the company's earnings have declined over the past year.

• Total Cash: The total cash on hand is $1.01B.

• Total Debt: The total debt is $19.47B, and the total debt-to-equity ratio is 176.70.

• Current Ratio: The current ratio is 0.86, which suggests that the company may have difficulty meeting its short-term obligations.

• Book Value per Share: The book value per share is $23.94.

• Operating Cash Flow: The operating cash flow over the trailing twelve months is $3.58B.

•Levered Free Cash Flow: The levered free cash flow over the trailing twelve months is -$2.91B.

Overall, the financials suggest that the company has experienced modest revenue growth over the past year, but is struggling with profitability, operating margin, and cash flow. The company has a high total debt to equity ratio, which suggests that it may be at risk of insolvency.

Here are some observations from the Dividends:

• Forward and Trailing Dividend Rates: The forward and trailing annual dividend rates are $4.32 and $3.78, respectively.

• Forward and Trailing Dividend Yields: The forward and trailing dividend yields are 2.59% and 2.28%, respectively.

• 5-Year Average Dividend Yield: The 5-year average dividend yield is 2.29%, which suggests that the company has maintained a relatively stable dividend policy over the past several years.

• Payout Ratio: The payout ratio is 51.64%, which means that the company distributes approximately half of its earnings as dividends.

• Dividend and Ex-Dividend Dates: The next dividend is scheduled for March 10, 2023, with an ex-dividend date of February 14, 2023.

Overall, the dividend and split data suggest that the company has a history of paying stable and consistent dividends. The forward dividend rate and yield are slightly higher than the trailing values, which could suggest that the company is confident in its future earnings and cash flow.

Income Statement:

The income statement shows the company's revenue, costs, and expenses for the past three years. Here are some observations:

• Total Revenue: The Company’s total revenue over the trailing twelve months is $108.72 billion.

• Cost of Revenue: The cost of revenue over the trailing twelve months is $81.04 billion, which means that the company's gross profit over the same period is $27.68 billion.

• Operating Expenses: The operating expenses over the trailing twelve months are $22.89 billion.

• Operating Income: The operating income over the trailing twelve months is $4.78 billion.

•Net Non-Operating Interest Income Expense: The net non-operating interest income and expense over the trailing twelve months are -$453 million.

•Other Income Expense: The other income and expense over the trailing twelve months is $61 million.

•Pretax Income: The pretax income over the trailing twelve months is $4.39 billion.

•Tax Provision: The tax provision over the trailing twelve months is $944 million.

•Net Income Common Stockholders: The net income available to common stockholders over the trailing twelve months is $3.45 billion.

•Diluted EPS: The diluted earnings per share over the trailing twelve months is $- as it is not applicable.

•Total Operating Income as Reported: The total operating income as reported over the trailing twelve months is $4.78 billion.

•Total Expenses: The total expenses over the trailing twelve months are $103.94 billion.

•Normalized Income: The normalized income over the trailing twelve months is $3.45 billion.

•Interest Expense: The interest expense over the trailing twelve months is $453 million.

•EBIT: The earnings before interest and taxes over the trailing twelve months are $4.84 billion.

•EBITDA: The earnings before interest, taxes, depreciation and amortization are $7.54 billion over the trailing twelve months.

Overall, the income statement shows that the company has generated significant revenue, but has also incurred substantial costs and expenses. The operating expenses and interest expenses suggest that the company may be facing some financial headwinds.

Balance Sheet:

The balance sheet shows the company's assets, liabilities, and equity as of the last three years. Here are some observations:

•Total Assets: The Company’s total assets as of the latest period is $53.81 billion.

•Total Liabilities: The total liabilities and minority interest as of the latest period is $40.98 billion.

•Total Equity: The total equity and minority interest as of the latest period is $12.83 billion.

•Common Stock Equity: The common stock equity as of the latest period is $12.83 billion.

•Total Capitalization: The total capitalization as of the latest period is $26.38 billion.

•Net Tangible Assets: The net tangible assets as of the latest period is $12.17 billion.

•Working Capital: The working capital as of the latest period is -$174 million, which means that the company has a negative working capital.

•Total Debt: The total debt as of the latest period is $16.47 billion.

•Net Debt: The net debt as of the latest period is $12.79 billion.

•Share Issued: The number of shares issued as of the latest period is 471,274.

Overall, the balance sheet shows that the company has significant assets and liabilities, and its common stock equity has decreased over the past three years. The negative working capital is a concern and may suggest that the company is facing some liquidity issues. The total debt and net debt levels suggest that the company may be carrying a significant debt load, which could impact its ability to invest in future growth.

If we consider the current situation of rising interest rates and high inflation, it would change the interpretation of the financial figures. As interest rates increase, it becomes more expensive for companies to service their debts. Therefore, carrying a significant debt load can have a negative impact on the company's financial position, especially in times of rising interest rates.

Additionally, high inflation rates can negatively impact a company's earnings, as it can lead to higher costs of goods sold and other expenses. This could reduce the company's profit margins and ultimately, its overall profitability.

Furthermore, negative working capital can also be a concern in times of high inflation and rising interest rates, as the company may face difficulty in paying off its short-term liabilities. This could ultimately result in a liquidity crisis and financial distress.

Overall, in the current situation of high inflation and rising interest rates, it is important for companies to carefully manage their debt levels, and ensure they have adequate liquidity to weather any short-term financial challenges.

Analyzing the cash flow statement in conjunction with the income statement and balance sheet, and taking into account current market dynamics, the following observations can be made:

•The operating cash flow has declined significantly from $10.5 billion in 2020 to $3.6 billion TTM, indicating that the company is generating less cash from its core operations. This decline in cash flow may be due to a decrease in revenue or an increase in operating expenses.

•The free cash flow, which is the cash available after capital expenditures, has been inconsistent over the past three years, with a significant decline in 2021. This inconsistency may be due to changes in capital expenditures or other investments made by the company.

•The company has negative working capital, which could be a cause for concern. Negative working capital means that the company has more short-term liabilities than current assets, which can result in liquidity issues if the company is unable to pay off its short-term obligations.

•The company has been investing heavily in capital expenditures, with $5.4 billion in 2021 TTM. While investment in capital expenditures can drive growth, it can also result in a reduction of cash available for other purposes, such as paying off debt or returning cash to shareholders.

•The company has been repurchasing its capital stock, which can reduce the number of outstanding shares and increase earnings per share. However, this can also result in a decrease in cash available for other purposes, such as investing in growth opportunities.

•The company has been issuing debt and repaying debt, which can impact its financial position, especially in times of rising interest rates. The company's total debt increased in 2021 TTM, and its debt-to-equity ratio is relatively high, indicating a significant amount of leverage.

Overall, the company's cash flow statement highlights some areas of concern, particularly the decline in operating cash flow and negative working capital, which could lead to liquidity issues if not managed effectively. Additionally, the company's heavy investment in capital expenditures and repurchasing of capital stock could impact its financial position, and its high level of debt could pose a risk in a rising interest rate environment.

​

Analyst Opinions:

Based on the analyst estimates for the next 4 quarters, there is a consensus that earnings will increase over the next year, but at a slower rate than in the previous year. The average EPS estimate for the current year is $5.54, which is lower than the previous year's EPS of $13.56. However, the average EPS estimate for next year is $9.29, which indicates a significant increase in earnings. The revenue estimates also suggest modest growth for the next 2 years, with a 2.3% increase in 2023 and a 2.5% increase in 2024.

The earnings history and trend suggest that there has been some variability in actual earnings compared to estimates, with a few quarters having surprises both positively and negatively. The current EPS estimate has remained relatively stable over the last 90 days, but there have been some revisions to both the current and next year's estimates in the last 30 days.

Overall, these estimates suggest that there is a moderate expectation for growth in the company's earnings and revenue over the next two years, but there is some uncertainty and variability in actual earnings compared to estimates.

If the market is worried about inflation and a potential recession, it could have an impact on the company's financial performance and stock price. Inflation could lead to higher costs for the company, which could impact its profitability and margins. A potential recession could also impact consumer spending and demand for the company's products or services. This could result in lower revenue and earnings for the company, which could negatively impact its stock price.

Therefore, if the market is worried about these macroeconomic factors, it could lead to a more cautious outlook for the company and its stock.

Summary (TLDR):

Based on the information provided, TGT stock for Target Corporation appears to have a stable financial performance in terms of revenue growth, profitability, and management effectiveness. However, there are concerns about the company's ability to manage its debt, particularly in a high-inflation environment with rising interest rates. The cash flow analysis indicates that the company has been generating positive operating cash flow but has also been carrying out significant capital expenditures and repurchasing capital stock.

Looking at the analyst estimates, there seems to be a general expectation of moderate growth in earnings and revenue for the next few quarters and years. However, the estimates have shown some downward revisions, possibly due to concerns about inflation and a potential recession.

Overall, TGT stock seems to be a stable investment choice, but investors should be aware of the potential risks associated with high debt levels and the current economic climate. As with any investment, it's essential to conduct thorough research and analysis before making any decisions.

Disclaimer:

This research paper is for informational purposes only and is not intended to be financial or investment advice. The information presented is based on publicly available sources that we believe to be reliable, but we make no representation or warranty, express or implied, as to the accuracy, completeness, or correctness of the information contained herein. The opinions expressed in this paper are those of the author and do not necessarily reflect the views of the company, its management, or its affiliates. Readers are encouraged to conduct their own research and consult with their financial advisors before making any investment decisions.