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Target Corp - Stock Quote TGT

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Morningstar's Target Corp Stock Analysis

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Currency in USD
Is it the right time to buy or sell?
Is it the right time to buy or sell?

1-Star Price

INVESTOR

5-Star Price

INVESTOR

Economic Moat

INVESTOR

Capital Allocation

INVESTOR

Excess Inventory to Hold Target’s Near-Term Earnings in Check, but Our Long-Term View Is Intact

Zain Akbari, CFA Equity Analyst

Analyst Note

| Zain Akbari, CFA |

Our $171 per share valuation of no-moat Target should dip by a low- to mid-single-digit percentage after it disclosed that ongoing inventory mismatches should pressure near-term results to a greater extent than initially expected. Citing markdowns, removal and storage of excess inventory, and high costs, management reduced its guidance. The firm’s leadership now foresees operating margins around 2% in the second quarter and a roughly 6% second-half mark, down from around 5.3% and an implied mid- to high-single-digit level, respectively. Our 5% second-quarter margin forecast should fall in line with management’s new goal, with little change to our second-half assumption (already just short of 6%). 

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Target Corp's Company Profile

Business Description

With 1,926 stores (as of the end of fiscal 2021), Target is a leading American general merchandise retailer, offering a variety of products across several categories, including beauty and household essentials (26% of fiscal 2021 sales), food and beverage (19%), home furnishings and décor (19%), hardlines (18%), and apparel and accessories (17%). Most of Target’s stores are large, averaging more than 125,000 square feet. The company has a significant e-commerce presence, deriving around 19% of sales from the channel (up from about 9% in fiscal 2019, before the pandemic). In addition to its namesake stores, Target owns Shipt, an online same-day delivery platform. After it exited Canada in 2015, virtually all of Target’s revenue is generated from the United States.

Contact
1000 Nicollet Mall
Minneapolis, MN, 55403
T +1 612 304-6073
Sector Consumer Defensive
Industry Discount Stores
Most Recent Earnings Apr 30, 2022
Fiscal Year End Jan 29, 2023
Stock Type Aggressive Growth
Employees 450,000

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