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Relative to Consumer Discretionary Sector Median (N=442)
Metric
TGT
Benchmark
P/E Ratio
16.6x
-32%
EV/EBITDA
9.4x
+93%
Price / Book
3.5x
Implied Value Audit
OVERVALUED
Implied Fair Value (vs Sector)
-47.0%
$64.52Spot: $121.85
Spot
Implied
-50% Delta+50% Delta
Relative valuation derived from Consumer Discretionary sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
20.7%
Sector: 6.2%
Dividend Analysis audit
HIGH YIELD
6.14%
Trailing Yield
$6.14
Per $100 Invested
High yield — monitor payout sustainability closely.
Est. Payout Ratio
102%HIGH
Analyst Projections
Analyst Consensus
Unlock Valuation Tools
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Based on our 6-factor quantitative model, TARGET CORP (TGT) receives a "Hold" rating with a composite score of 52.6/100, ranked #155 out of 4446 stocks. Key factor scores: Quality 50/100, Value 70/100, Momentum 56/100. This is quantitative analysis only — not investment advice.
TARGET CORP (TGT) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does TARGET CORP Do?
Target Corporation operates as a general merchandise retailer in the United States. The company offers food assortments, including perishables, dry grocery, dairy, and frozen items; apparel, accessories, home décor products, electronics, toys, seasonal offerings, food, and other merchandise; and beauty and household essentials. It also provides in-store amenities, such as Target Café, Target Optical, Starbucks, and other food service offerings. The company sells its products through its stores; and digital channels, including Target.com. As of March 09, 2022, the company operated approximately 2,000 stores. Target Corporation was incorporated in 1902 and is headquartered in Minneapolis, Minnesota. TARGET CORP (TGT) is classified as a large-cap stock in the Consumer Discretionary sector, specifically within the Retail industry. The company is led by CEO Brian C. Cornell and employs approximately 450,000 people, headquartered in Minneapolis, Minnesota. With a market capitalization of $54.5B, TGT is one of the prominent companies in the Consumer Discretionary sector.
TARGET CORP (TGT) Stock Rating — Hold (April 2026)
As of April 2026, TARGET CORP receives a Hold rating with a composite score of 52.6/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.TGT ranks #155 out of 4,446 stocks in our coverage universe. Within the Consumer Discretionary sector, TARGET CORP ranks #5 of 442 stocks, placing it in the top 10% of its Consumer Discretionary peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
TGT Stock Price and 52-Week Range
TARGET CORP (TGT) currently trades at $121.85. The stock lost $2.18 (1.8%) in the most recent trading session. The 52-week high for TGT is $126.00, which means the stock is currently trading -3.3% from its annual peak. The 52-week low is $83.44, putting the stock 46.0% above its annual trough. Recent trading volume was 3.7M shares, reflecting moderate market activity.
Is TGT Overvalued or Undervalued? — Valuation Analysis
TARGET CORP (TGT) carries a value factor score of 70/100 in the Blank Capital model, suggesting the stock trades at a meaningful discount to its fundamental earning power. The trailing price-to-earnings ratio is 16.65x, compared to the Consumer Discretionary sector average of 24.47x — a discount of 32%. The price-to-book ratio stands at 3.45x, versus the sector average of 1.99x. The price-to-sales ratio is 0.56x, compared to 0.27x for the average Consumer Discretionary stock. On an enterprise value basis, TGT trades at 9.45x EV/EBITDA, versus 4.91x for the sector. The EV/EBIT multiple is 12.19x.
Based on these multiples, TARGET CORP appears attractively valued relative to both its sector peers and the broader market. Value-oriented investors may find the current entry point compelling, particularly if the company's fundamental quality metrics also score well.
TARGET CORP Profitability — ROE, Margins, and Quality Score
TARGET CORP (TGT) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 20.7%, compared to the Consumer Discretionary sector average of 6.2%, which demonstrates strong shareholder value creation. Return on assets (ROA) comes in at 5.6% versus the sector average of 2.5%.
On a margin basis, TARGET CORP reports gross margins of 28.4%, compared to 36.9% for the sector. The operating margin is 4.7% (sector: 3.8%). Net profit margin stands at 3.4%, versus 2.1% for the average Consumer Discretionary stock. Revenue growth is running at -0.7% on a trailing basis, compared to 3.3% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
TGT Debt, Balance Sheet, and Financial Health
TARGET CORP has a debt-to-equity ratio of 89.0%, compared to the Consumer Discretionary sector average of 89.0%. Leverage is within a manageable range for the industry, though investors should monitor debt trends over time. The current ratio is 0.94x, which may signal near-term liquidity tightness. Total debt on the balance sheet is $14.40B. Cash and equivalents stand at $3.82B.
TGT has a beta of 0.74, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for TARGET CORP is 73/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
TARGET CORP Revenue and Earnings History — Quarterly Trend
In TTM 2026, TARGET CORP reported revenue of $99.60B and earnings per share (EPS) of $8.16. Net income for the quarter was $3.35B. Gross margin was 28.4%. Operating income came in at $4.68B.
In FY 2026, TARGET CORP reported revenue of $104.78B and earnings per share (EPS) of $8.16. Net income for the quarter was $3.71B. Gross margin was 27.9%. Revenue grew -1.7% year-over-year compared to FY 2025. Operating income came in at $5.12B.
In Q3 2025, TARGET CORP reported revenue of $25.27B and earnings per share (EPS) of $1.52. Net income for the quarter was $689M. Gross margin was 28.2%. Operating income came in at $948M.
In Q3 2026, TARGET CORP reported revenue of $25.27B and earnings per share (EPS) of $1.52. Net income for the quarter was $689M. Gross margin was 28.2%. Revenue grew 0.0% year-over-year compared to Q3 2025. Operating income came in at $948M.
Over the past 8 quarters, TARGET CORP has demonstrated a growth trajectory, with revenue expanding from $25.45B to $99.60B. Investors analyzing TGT stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
TGT Dividend Yield and Income Analysis
TARGET CORP (TGT) currently pays a dividend yield of 6.1%. At this yield, a $10,000 investment in TGT stock would generate approximately $$614.00 in annual dividend income.
TGT Momentum and Technical Analysis Profile
TARGET CORP (TGT) has a momentum factor score of 56/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 34/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 25/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
TGT vs Competitors — Consumer Discretionary Sector Ranking and Peer Comparison
Comparing TGT against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full TGT vs S&P 500 (SPY) comparison to assess how TARGET CORP stacks up against the broader market across all factor dimensions.
TGT Next Earnings Date
No upcoming earnings date has been announced for TARGET CORP (TGT) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy TGT? — Investment Thesis Summary
TARGET CORP presents a balanced picture with arguments on both sides. The value score of 70/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 73/100) reduces downside risk.
In summary, TARGET CORP (TGT) earns a Hold rating with a composite score of 52.6/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on TGT stock.
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Institutional Research Dossier
TARGET CORP (TGT) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
We maintain a Hold rating on Target (TGT), driven by a balanced view of its strong brand recognition and efficient operations offset by concerns regarding recent revenue stagnation and free cash flow challenges. While Target's valuation appears attractive relative to its peers and historical averages, the company's ability to navigate a dynamic retail landscape and improve profitability remains uncertain. The key takeaway is that Target's future performance hinges on its ability to adapt to evolving consumer preferences and effectively manage its supply chain and inventory.
Target's consistent profitability and return on equity demonstrate its operational strengths, but the negative free cash flow and recent revenue declines raise concerns about its long-term growth prospects. The company's strategic initiatives, such as expanding its private-label brands and enhancing its digital capabilities, are crucial for driving future growth. However, the competitive retail environment and macroeconomic headwinds pose significant challenges. We believe a Hold rating is warranted until there is clearer evidence of sustained revenue growth and improved free cash flow generation.
Business Strategy & Overview
Target Corporation operates as a general merchandise retailer, primarily in the United States, offering a wide array of products ranging from food and apparel to electronics and home décor. The company's business model centers around providing a differentiated shopping experience through a combination of private-label brands, exclusive partnerships, and in-store amenities like Target Café and Starbucks. Target aims to cater to a broad customer base while maintaining a focus on style, value, and convenience.
Target's strategic positioning involves differentiating itself from competitors like Walmart and Amazon by emphasizing its 'cheap chic' image and curated product selection. The company invests heavily in its private-label brands, such as Cat & Jack and Good & Gather, which offer higher margins and greater control over product quality and design. These brands contribute significantly to Target's overall profitability and brand loyalty.
The company's digital channels, including Target.com, play a crucial role in its omnichannel strategy. Target offers various fulfillment options, such as in-store pickup, same-day delivery through Shipt, and standard shipping, to cater to different customer preferences. The company continues to invest in its digital infrastructure to enhance the online shopping experience and drive online sales growth.
Target's industry context is characterized by intense competition from both brick-and-mortar retailers and e-commerce giants. The company faces challenges related to changing consumer preferences, supply chain disruptions, and inflationary pressures. To address these challenges, Target is focused on optimizing its store network, improving its supply chain efficiency, and enhancing its customer loyalty programs.
Looking ahead, Target's strategic priorities include expanding its private-label offerings, enhancing its digital capabilities, and optimizing its store footprint. The company is also focused on improving its supply chain efficiency and reducing costs to enhance profitability. Successful execution of these strategies will be critical for Target to maintain its competitive position and drive long-term growth.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
-0.7%
Sector: 3.3%
-122% VS SCTR
Economic Moat Analysis
Target possesses a narrow economic moat, primarily derived from its brand recognition and efficient scale. While not as wide as some of its competitors, Target's brand reputation for offering stylish and affordable products provides a degree of pricing power and customer loyalty. The company's private-label brands, in particular, contribute to its brand differentiation and create a unique shopping experience that is difficult for competitors to replicate.
Target's efficient scale also contributes to its narrow moat. The company's extensive store network and well-developed supply chain enable it to achieve economies of scale in purchasing, distribution, and marketing. This allows Target to offer competitive prices while maintaining acceptable profit margins. However, the company's scale advantage is not insurmountable, as competitors like Walmart and Amazon have even larger and more efficient operations.
The retail industry is characterized by intense competition and low switching costs, which limits the strength of Target's moat. Customers can easily switch to alternative retailers if they find better prices, products, or shopping experiences. This puts pressure on Target to continuously innovate and improve its offerings to retain customers.
While Target's brand and scale provide some competitive advantages, they are not strong enough to create a wide economic moat. The company faces significant competition from both brick-and-mortar retailers and e-commerce giants, and its ability to maintain its market share and profitability depends on its ability to adapt to changing consumer preferences and effectively manage its operations.
The rise of e-commerce and the increasing importance of online shopping pose a threat to Target's moat. While the company has invested heavily in its digital channels, it still faces challenges in competing with the convenience and selection offered by online retailers like Amazon. To strengthen its moat, Target needs to continue to innovate and differentiate its offerings, both online and offline.
Financial Health & Profitability
Target's financial health presents a mixed picture. The company's revenue has shown some volatility, with a recent decline of 0.7% year-over-year, indicating potential challenges in maintaining sales growth. However, the company's profitability metrics, such as gross margin (28.4%), operating margin (4.7%), and net margin (3.4%), are generally in line with or slightly above the sector averages, suggesting efficient operations.
Target's return on equity (ROE) of 20.7% significantly exceeds the sector average of 5.8%, indicating strong profitability relative to shareholder equity. This suggests that the company is effectively utilizing its equity to generate profits. However, it's important to note that ROE can be influenced by leverage, and Target's debt-to-equity ratio of 89.00 is comparable to the sector average of 91.00.
A concerning aspect of Target's financial health is its negative free cash flow of -$380.61 million. This indicates that the company is not generating enough cash from its operations to cover its capital expenditures and other cash outflows. This could potentially limit the company's ability to invest in growth initiatives or return capital to shareholders. The quarterly financial history does not provide consistent FCF data, making it difficult to assess the trend over time.
Target's balance sheet shows a total cash balance of $3.82 billion and total debt of $14.40 billion. The current ratio of 0.94 indicates that the company's current liabilities slightly exceed its current assets, which could pose a liquidity risk if the company faces unexpected financial challenges. The company's ability to manage its working capital and generate positive cash flow will be crucial for maintaining its financial stability.
Analyzing the quarterly financial history reveals some fluctuations in revenue and profitability. While gross margins have remained relatively stable, operating margins have varied, indicating potential challenges in controlling operating expenses. The company's ability to consistently improve its operating efficiency and generate positive free cash flow will be critical for its long-term financial health.
Valuation Assessment
Target's valuation appears attractive relative to its peers and historical averages. The company's price-to-earnings (P/E) ratio of 13.9x is significantly lower than the sector average of 28.0x, suggesting that the stock is undervalued relative to its earnings. Similarly, the company's enterprise value-to-EBITDA (EV/EBITDA) ratio of 2.1x is substantially lower than the sector average of 5.3x, further indicating undervaluation.
However, it's important to consider the company's recent revenue decline and negative free cash flow when assessing its valuation. While the low P/E and EV/EBITDA ratios may suggest undervaluation, they could also reflect investor concerns about the company's future growth prospects and financial health. The negative free cash flow, in particular, raises questions about the sustainability of the company's earnings and its ability to generate value for shareholders.
The BCR proprietary quant model assigns a Value score of 70/100 to Target, indicating that the stock is relatively undervalued based on its multiples. However, the model also assigns a lower Investment score of 34/100, reflecting concerns about the company's capital allocation and growth prospects. This suggests that while the stock may be cheap based on its current earnings, there are doubts about its ability to generate future growth.
A discounted cash flow (DCF) analysis would be necessary to determine the intrinsic value of Target's stock. However, given the negative free cash flow and uncertain growth prospects, it's difficult to make a precise valuation estimate. The company's ability to improve its free cash flow generation and return to revenue growth will be crucial for justifying a higher valuation.
Overall, Target's valuation appears attractive based on its P/E and EV/EBITDA ratios, but the company's recent financial performance and uncertain growth prospects warrant caution. The stock may be undervalued, but it's important to consider the risks and challenges facing the company before making an investment decision.
Risk & Uncertainty
Target faces several specific, idiosyncratic risks that could negatively impact its business and financial performance. One of the most significant risks is the intense competition in the retail industry. The company competes with a wide range of retailers, including brick-and-mortar stores, e-commerce giants, and specialty retailers. This competition puts pressure on Target to continuously innovate and improve its offerings to retain customers and maintain its market share.
Another risk is the potential for supply chain disruptions. The company relies on a complex global supply chain to source and distribute its products. Disruptions to this supply chain, such as port congestion, transportation delays, or supplier bankruptcies, could lead to inventory shortages, higher costs, and reduced sales. The company's ability to effectively manage its supply chain is crucial for mitigating this risk.
Changes in consumer preferences and spending patterns also pose a risk to Target's business. The company's success depends on its ability to anticipate and respond to evolving consumer trends. If Target fails to adapt to changing consumer preferences, it could lose market share to competitors. The company's investments in private-label brands and digital channels are aimed at mitigating this risk.
The company's reliance on debt financing also poses a risk. Target has a significant amount of debt on its balance sheet, which could increase its financial risk and limit its ability to invest in growth initiatives. Rising interest rates could also increase the company's borrowing costs and reduce its profitability. The company's ability to manage its debt effectively is crucial for maintaining its financial stability.
Bulls Say / Bears Say
The Bull Case
BULL VIEWTarget's strong brand and loyal customer base provide a solid foundation for future growth, particularly as they expand their private-label offerings and enhance their digital capabilities.
BULL VIEWThe company's attractive valuation, with a P/E ratio significantly below the sector average, presents a compelling investment opportunity for value-oriented investors.
BULL VIEWTarget's commitment to shareholder returns, through dividends and share repurchases, demonstrates confidence in its long-term prospects and provides a source of downside protection.
The Bear Case
BEAR VIEWTarget's recent revenue decline and negative free cash flow raise concerns about its ability to generate sustainable growth and maintain its competitive position.
BEAR VIEWThe intense competition in the retail industry and the increasing dominance of e-commerce giants like Amazon pose a significant threat to Target's market share and profitability.
BEAR VIEWThe company's high debt levels and relatively low current ratio increase its financial risk and limit its flexibility to respond to unexpected challenges.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score TGT and 4,400+ other equities.
TARGET CORP exhibits a 60% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
5.6%
Sector: 2.5%
Gross Margin
Pricing power and cost efficiency
28.4%
Sector: 36.9%
Operating Margin
Core business profitability
4.7%
Sector: 3.8%
Net Margin
Bottom-line profitability
3.4%
Sector: 2.1%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield0.00%
Yield Delta—
Income Projection audit
A $10,000 investment would generate approximately $614 annually in dividends at the current trailing rate.
