Should You Buy Target Stock Today?
Target (NYSE: TGT) is a large cap company that operates within the multiline retail industry. Its market cap is $31 billion today and the total one-year return is -23.73% for shareholders.
Target stock is underperforming the market. It's beaten down, but it reports earnings on Wednesday. So is it a good time to buy? To answer this question we've turned to the Investment U Stock Grader. Our research team built this system to diagnose the financial health of a company.
Our system looks at six key metrics...
Earnings-per-Share (EPS) Growth: Target reported a recent EPS growth rate of -36.91%. That's below the multiline retail industry average of 32.69%. That's not a good sign. We like to see companies that have higher earnings growth.
Price-to-Earnings (P/E): The average price-to-earnings ratio of the multiline retail industry is 27.45. And Target's ratio comes in at 11.11. It's trading at a better value than many of its competitors.
Debt-to-Equity : The debt-to-equity ratio for Target stock is 116.4. That's below the multiline retail industry average of 127.64. The company is less leveraged.
Free Cash Flow per Share Growth : Target's FCF has been higher than its competitors over the last year. That's good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It's one of our most important fundamental factors.
Profit Margins : The profit margin of Target comes in at 3.95% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Target's profit margin is below the multiline retail average of 6.92%. So that's a negative indicator for investors.
Return on Equity : Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for Target is 22.89%, and that's above its industry average ROE of 20.95%.
Target stock passes four of our six key metrics today. That's why our Investment U Stock Grader rates it as a buy with caution.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That's why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth. For more details, click here.
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