Intrinsic value of Target - TGT

Previous Close

$84.32

  Intrinsic Value

$82.96

stock screener

  Rating & Target

hold

-2%

Previous close

$84.32

 
Intrinsic value

$82.96

 
Up/down potential

-2%

 
Rating

hold

We calculate the intrinsic value of TGT stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 45.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  3.40
  3.56
  3.70
  3.83
  3.95
  4.06
  4.15
  4.23
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.63
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.82
  4.84
  4.86
  4.87
  4.89
  4.90
  4.91
  4.92
  4.92
Revenue, $m
  74,323
  76,969
  79,820
  82,880
  86,154
  89,647
  93,367
  97,321
  101,517
  105,964
  110,671
  115,649
  120,908
  126,462
  132,322
  138,502
  145,017
  151,881
  159,110
  166,722
  174,733
  183,164
  192,034
  201,363
  211,174
  221,491
  232,336
  243,737
  255,720
  268,313
Variable operating expenses, $m
  69,046
  71,504
  74,153
  76,995
  80,037
  83,282
  86,738
  90,411
  94,309
  98,440
  102,813
  107,437
  112,324
  117,483
  122,927
  128,669
  134,721
  141,097
  147,813
  154,884
  162,327
  170,160
  178,399
  187,066
  196,181
  205,765
  215,840
  226,431
  237,563
  249,263
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  69,046
  71,504
  74,153
  76,995
  80,037
  83,282
  86,738
  90,411
  94,309
  98,440
  102,813
  107,437
  112,324
  117,483
  122,927
  128,669
  134,721
  141,097
  147,813
  154,884
  162,327
  170,160
  178,399
  187,066
  196,181
  205,765
  215,840
  226,431
  237,563
  249,263
Operating income, $m
  5,277
  5,465
  5,667
  5,884
  6,117
  6,365
  6,629
  6,910
  7,208
  7,523
  7,858
  8,211
  8,584
  8,979
  9,395
  9,834
  10,296
  10,784
  11,297
  11,837
  12,406
  13,005
  13,634
  14,297
  14,993
  15,726
  16,496
  17,305
  18,156
  19,050
EBITDA, $m
  7,794
  8,071
  8,370
  8,691
  9,034
  9,401
  9,791
  10,205
  10,645
  11,111
  11,605
  12,127
  12,679
  13,261
  13,875
  14,524
  15,207
  15,926
  16,685
  17,483
  18,323
  19,207
  20,137
  21,115
  22,144
  23,226
  24,363
  25,559
  26,815
  28,136
Interest expense (income), $m
  999
  719
  773
  830
  891
  957
  1,027
  1,103
  1,183
  1,268
  1,358
  1,454
  1,555
  1,662
  1,776
  1,895
  2,022
  2,155
  2,295
  2,443
  2,598
  2,762
  2,935
  3,116
  3,307
  3,508
  3,719
  3,942
  4,175
  4,421
  4,679
Earnings before tax, $m
  4,558
  4,692
  4,838
  4,993
  5,160
  5,338
  5,526
  5,727
  5,940
  6,165
  6,404
  6,656
  6,922
  7,203
  7,500
  7,812
  8,142
  8,489
  8,854
  9,239
  9,644
  10,070
  10,518
  10,989
  11,485
  12,006
  12,554
  13,130
  13,735
  14,372
Tax expense, $m
  1,231
  1,267
  1,306
  1,348
  1,393
  1,441
  1,492
  1,546
  1,604
  1,665
  1,729
  1,797
  1,869
  1,945
  2,025
  2,109
  2,198
  2,292
  2,391
  2,494
  2,604
  2,719
  2,840
  2,967
  3,101
  3,242
  3,390
  3,545
  3,709
  3,880
Net income, $m
  3,327
  3,425
  3,531
  3,645
  3,767
  3,896
  4,034
  4,181
  4,336
  4,501
  4,675
  4,859
  5,053
  5,258
  5,475
  5,703
  5,943
  6,197
  6,464
  6,744
  7,040
  7,351
  7,678
  8,022
  8,384
  8,765
  9,165
  9,585
  10,027
  10,491

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  41,684
  43,168
  44,767
  46,483
  48,319
  50,279
  52,365
  54,583
  56,936
  59,430
  62,070
  64,862
  67,812
  70,927
  74,213
  77,679
  81,333
  85,183
  89,237
  93,506
  98,000
  102,728
  107,703
  112,935
  118,438
  124,224
  130,306
  136,700
  143,421
  150,484
Adjusted assets (=assets-cash), $m
  41,684
  43,168
  44,767
  46,483
  48,319
  50,279
  52,365
  54,583
  56,936
  59,430
  62,070
  64,862
  67,812
  70,927
  74,213
  77,679
  81,333
  85,183
  89,237
  93,506
  98,000
  102,728
  107,703
  112,935
  118,438
  124,224
  130,306
  136,700
  143,421
  150,484
Revenue / Adjusted assets
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
  1.783
Average production assets, $m
  25,418
  26,323
  27,298
  28,345
  29,465
  30,659
  31,932
  33,284
  34,719
  36,240
  37,849
  39,552
  41,351
  43,250
  45,254
  47,368
  49,596
  51,943
  54,416
  57,019
  59,759
  62,642
  65,676
  68,866
  72,222
  75,750
  79,459
  83,358
  87,456
  91,763
Working capital, $m
  -2,973
  -3,079
  -3,193
  -3,315
  -3,446
  -3,586
  -3,735
  -3,893
  -4,061
  -4,239
  -4,427
  -4,626
  -4,836
  -5,058
  -5,293
  -5,540
  -5,801
  -6,075
  -6,364
  -6,669
  -6,989
  -7,327
  -7,681
  -8,055
  -8,447
  -8,860
  -9,293
  -9,749
  -10,229
  -10,733
Total debt, $m
  14,307
  15,363
  16,499
  17,720
  19,025
  20,418
  21,902
  23,478
  25,152
  26,925
  28,802
  30,787
  32,884
  35,099
  37,436
  39,900
  42,498
  45,235
  48,118
  51,153
  54,348
  57,710
  61,247
  64,967
  68,879
  72,993
  77,318
  81,864
  86,642
  91,664
Total liabilities, $m
  29,637
  30,693
  31,829
  33,050
  34,355
  35,748
  37,232
  38,808
  40,482
  42,255
  44,132
  46,117
  48,214
  50,429
  52,766
  55,230
  57,828
  60,565
  63,448
  66,483
  69,678
  73,040
  76,577
  80,297
  84,209
  88,323
  92,648
  97,194
  101,972
  106,994
Total equity, $m
  12,047
  12,476
  12,938
  13,434
  13,964
  14,531
  15,134
  15,774
  16,455
  17,175
  17,938
  18,745
  19,598
  20,498
  21,448
  22,449
  23,505
  24,618
  25,790
  27,023
  28,322
  29,688
  31,126
  32,638
  34,228
  35,901
  37,659
  39,506
  41,449
  43,490
Total liabilities and equity, $m
  41,684
  43,169
  44,767
  46,484
  48,319
  50,279
  52,366
  54,582
  56,937
  59,430
  62,070
  64,862
  67,812
  70,927
  74,214
  77,679
  81,333
  85,183
  89,238
  93,506
  98,000
  102,728
  107,703
  112,935
  118,437
  124,224
  130,307
  136,700
  143,421
  150,484
Debt-to-equity ratio
  1.190
  1.230
  1.280
  1.320
  1.360
  1.410
  1.450
  1.490
  1.530
  1.570
  1.610
  1.640
  1.680
  1.710
  1.750
  1.780
  1.810
  1.840
  1.870
  1.890
  1.920
  1.940
  1.970
  1.990
  2.010
  2.030
  2.050
  2.070
  2.090
  2.110
Adjusted equity ratio
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289
  0.289

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,327
  3,425
  3,531
  3,645
  3,767
  3,896
  4,034
  4,181
  4,336
  4,501
  4,675
  4,859
  5,053
  5,258
  5,475
  5,703
  5,943
  6,197
  6,464
  6,744
  7,040
  7,351
  7,678
  8,022
  8,384
  8,765
  9,165
  9,585
  10,027
  10,491
Depreciation, amort., depletion, $m
  2,517
  2,606
  2,703
  2,806
  2,917
  3,036
  3,162
  3,295
  3,438
  3,588
  3,747
  3,916
  4,094
  4,282
  4,481
  4,690
  4,910
  5,143
  5,388
  5,645
  5,917
  6,202
  6,503
  6,818
  7,151
  7,500
  7,867
  8,253
  8,659
  9,085
Funds from operations, $m
  5,844
  6,032
  6,234
  6,452
  6,684
  6,932
  7,196
  7,476
  7,774
  8,089
  8,422
  8,775
  9,147
  9,540
  9,955
  10,393
  10,854
  11,340
  11,851
  12,390
  12,957
  13,553
  14,181
  14,841
  15,535
  16,265
  17,032
  17,838
  18,686
  19,577
Change in working capital, $m
  -98
  -106
  -114
  -122
  -131
  -140
  -149
  -158
  -168
  -178
  -188
  -199
  -210
  -222
  -234
  -247
  -261
  -275
  -289
  -304
  -320
  -337
  -355
  -373
  -392
  -413
  -434
  -456
  -479
  -504
Cash from operations, $m
  5,941
  6,137
  6,348
  6,574
  6,815
  7,072
  7,345
  7,634
  7,941
  8,267
  8,610
  8,974
  9,358
  9,763
  10,190
  10,640
  11,114
  11,614
  12,140
  12,694
  13,277
  13,890
  14,536
  15,214
  15,927
  16,677
  17,466
  18,294
  19,165
  20,080
Maintenance CAPEX, $m
  -2,435
  -2,517
  -2,606
  -2,703
  -2,806
  -2,917
  -3,036
  -3,162
  -3,295
  -3,438
  -3,588
  -3,747
  -3,916
  -4,094
  -4,282
  -4,481
  -4,690
  -4,910
  -5,143
  -5,388
  -5,645
  -5,917
  -6,202
  -6,503
  -6,818
  -7,151
  -7,500
  -7,867
  -8,253
  -8,659
New CAPEX, $m
  -821
  -905
  -975
  -1,047
  -1,120
  -1,195
  -1,272
  -1,352
  -1,435
  -1,521
  -1,610
  -1,702
  -1,799
  -1,899
  -2,004
  -2,114
  -2,228
  -2,347
  -2,472
  -2,603
  -2,740
  -2,883
  -3,033
  -3,191
  -3,355
  -3,528
  -3,709
  -3,899
  -4,098
  -4,307
Cash from investing activities, $m
  -3,256
  -3,422
  -3,581
  -3,750
  -3,926
  -4,112
  -4,308
  -4,514
  -4,730
  -4,959
  -5,198
  -5,449
  -5,715
  -5,993
  -6,286
  -6,595
  -6,918
  -7,257
  -7,615
  -7,991
  -8,385
  -8,800
  -9,235
  -9,694
  -10,173
  -10,679
  -11,209
  -11,766
  -12,351
  -12,966
Free cash flow, $m
  2,685
  2,716
  2,767
  2,825
  2,889
  2,960
  3,037
  3,121
  3,211
  3,308
  3,413
  3,524
  3,643
  3,769
  3,903
  4,046
  4,197
  4,356
  4,525
  4,703
  4,892
  5,090
  5,300
  5,521
  5,753
  5,998
  6,256
  6,528
  6,814
  7,114
Issuance/(repayment) of debt, $m
  985
  1,055
  1,137
  1,220
  1,306
  1,393
  1,483
  1,577
  1,673
  1,773
  1,877
  1,985
  2,097
  2,215
  2,337
  2,464
  2,598
  2,737
  2,883
  3,035
  3,195
  3,362
  3,537
  3,720
  3,912
  4,114
  4,325
  4,546
  4,778
  5,022
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  985
  1,055
  1,137
  1,220
  1,306
  1,393
  1,483
  1,577
  1,673
  1,773
  1,877
  1,985
  2,097
  2,215
  2,337
  2,464
  2,598
  2,737
  2,883
  3,035
  3,195
  3,362
  3,537
  3,720
  3,912
  4,114
  4,325
  4,546
  4,778
  5,022
Total cash flow (excl. dividends), $m
  3,670
  3,771
  3,904
  4,045
  4,195
  4,353
  4,520
  4,697
  4,884
  5,081
  5,290
  5,509
  5,740
  5,984
  6,240
  6,510
  6,794
  7,093
  7,408
  7,739
  8,087
  8,452
  8,837
  9,241
  9,666
  10,112
  10,581
  11,074
  11,592
  12,136
Retained Cash Flow (-), $m
  -396
  -429
  -462
  -496
  -531
  -566
  -603
  -641
  -680
  -721
  -763
  -807
  -853
  -900
  -950
  -1,002
  -1,056
  -1,113
  -1,172
  -1,234
  -1,299
  -1,367
  -1,438
  -1,512
  -1,590
  -1,672
  -1,758
  -1,848
  -1,942
  -2,041
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  3,274
  3,342
  3,442
  3,549
  3,664
  3,787
  3,917
  4,056
  4,204
  4,361
  4,527
  4,702
  4,888
  5,084
  5,290
  5,508
  5,738
  5,981
  6,236
  6,505
  6,788
  7,086
  7,399
  7,729
  8,076
  8,440
  8,823
  9,226
  9,650
  10,095
Discount rate, %
  4.50
  4.73
  4.96
  5.21
  5.47
  5.74
  6.03
  6.33
  6.65
  6.98
  7.33
  7.70
  8.08
  8.49
  8.91
  9.36
  9.82
  10.31
  10.83
  11.37
  11.94
  12.54
  13.16
  13.82
  14.51
  15.24
  16.00
  16.80
  17.64
  18.52
PV of cash for distribution, $m
  3,133
  3,047
  2,976
  2,897
  2,807
  2,708
  2,600
  2,482
  2,355
  2,221
  2,079
  1,931
  1,780
  1,625
  1,471
  1,317
  1,167
  1,022
  884
  755
  635
  527
  430
  346
  273
  211
  160
  119
  87
  62
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Target Corporation (Target) is a general merchandise retailer selling products through its stores and digital channels. Its general merchandise stores offer an edited food assortment, including perishables, dry grocery, dairy and frozen items. Its digital channels include a range of general merchandise, including a range of items found in its stores, along with an assortment, such as additional sizes and colors sold only online. Its owned brands include Archer Farms, Market Pantry, Sutton & Dodge, Art Class, Merona, Threshold, Ava & Viv, Pillowfort, Room Essentials, Wine Cube, Cat & Jack, Simply Balanced and Wondershop. Its exclusive brands include C9 by Champion, Hand Made Modern, Mossimo, DENIZEN from Levi's, Nate Berkus for Target, Fieldcrest, Kid Made Modern, Genuine Kids from OshKosh and Liz Lange for Target. As of January 28, 2017, the Company had 1,802 stores across the United States, including 1,535 owned stores, 107 leased stores and 160 owned buildings on leased land.

FINANCIAL RATIOS  of  Target (TGT)

Valuation Ratios
P/E Ratio 17.1
Price to Sales 0.7
Price to Book 4.3
Price to Tangible Book
Price to Cash Flow 8.6
Price to Free Cash Flow 12.1
Growth Rates
Sales Growth Rate -5.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 7.6%
Cap. Spend. - 3 Yr. Gr. Rate -3.9%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 100.7%
Total Debt to Equity 116.4%
Interest Coverage 5
Management Effectiveness
Return On Assets 8.8%
Ret/ On Assets - 3 Yr. Avg. 5.2%
Return On Total Capital 11.1%
Ret/ On T. Cap. - 3 Yr. Avg. 6%
Return On Equity 22.9%
Return On Equity - 3 Yr. Avg. 12.3%
Asset Turnover 1.8
Profitability Ratios
Gross Margin 29.7%
Gross Margin - 3 Yr. Avg. 29.5%
EBITDA Margin 10.4%
EBITDA Margin - 3 Yr. Avg. 10%
Operating Margin 7.2%
Oper. Margin - 3 Yr. Avg. 7%
Pre-Tax Margin 5.7%
Pre-Tax Margin - 3 Yr. Avg. 5.8%
Net Profit Margin 3.9%
Net Profit Margin - 3 Yr. Avg. 2.1%
Effective Tax Rate 32.7%
Eff/ Tax Rate - 3 Yr. Avg. 32.7%
Payout Ratio 49.3%

TGT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TGT stock intrinsic value calculation we used $71879 million for the last fiscal year's total revenue generated by Target. The default revenue input number comes from 0001 income statement of Target. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our TGT stock valuation model: a) initial revenue growth rate of 3.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.5%, whose default value for TGT is calculated based on our internal credit rating of Target, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Target.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of TGT stock the variable cost ratio is equal to 92.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for TGT stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Target.

Corporate tax rate of 27% is the nominal tax rate for Target. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the TGT stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for TGT are equal to 34.2%.

Life of production assets of 10.1 years is the average useful life of capital assets used in Target operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for TGT is equal to -4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $11651 million for Target - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 533.135 million for Target is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Target at the current share price and the inputted number of shares is $45.0 billion.

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COMPANY NEWS

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▶ Why Target Stock Is Up 31% in 2018   [Nov-10-18 10:33AM  Motley Fool]
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▶ Retail's dilemma: 3 trades   [Nov-08-18 06:02PM  CNBC Videos]
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▶ Mayor's executive order aims to stop stores like Target from closing   [02:45PM  American City Business Journals]
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▶ Lowe's Taps Target Digital Leader as CIO   [Nov-06-18 05:38PM  The Wall Street Journal]
▶ Shipt expands with two grocery stores, continues Target rollout   [03:18PM  American City Business Journals]
▶ Celebrity hairstylist Kristin Ess expands Target line   [10:10AM  American City Business Journals]
▶ [$$] Amazon Offering Free Shipping on Holiday Orders   [09:10AM  The Wall Street Journal]
▶ How Twin Cities' businesses encourage employees to vote on Election Day   [Nov-02-18 03:56PM  American City Business Journals]
▶ Lowe's snags latest C-level hire from Target   [02:43PM  American City Business Journals]
▶ US adds 250k jobs in October   [01:06PM  Yahoo Finance Video]
▶ P&G teams with Target on campaign to boost girl power   [11:44AM  American City Business Journals]
▶ The Top 3 Chevron Shareholders   [09:27AM  Investopedia]
▶ Target criticized by Chicago Mayor Rahm Emanuel over store closings   [Nov-01-18 10:17PM  American City Business Journals]
▶ Best Buy to toy market: Can we play, too?   [Oct-30-18 07:36AM  American City Business Journals]
▶ Target Stock Is Still Not Cheap Enough   [03:19PM  InvestorPlace]
▶ Sam's Club gets rid of cashiers   [01:26PM  Yahoo Finance Video]
▶ With Toys R Us gone, these retailers are stepping up their game   [01:20PM  American City Business Journals]
▶ Target joins the foodie holiday countdown market   [09:47AM  American City Business Journals]
▶ Target Ups the Ante in the Delivery Wars   [Oct-27-18 11:20AM  Motley Fool]
▶ Target technology exec Tom Kadlec dies unexpectedly   [01:48PM  American City Business Journals]

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