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Category: Stock Market and Target Corporation
Date: 16 March 2020 Stock Price: $96.61 We take a look at the 4th quarter 2019 earnings report of Target, one of the biggest retailers in the USA. The group's next quarter's prospects and earnings must be excellent with panic buying and stockpiling taking place due to Coronavirus fears.
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About Target Corporation
Minneapolis-based Target Corporation (NYSE: TGT) serves guests at more than 1,800 stores and at Target.com. Target is currently ranked as the 8th biggest retailer in the USA and is part of the S&P 500 index.
Target is one of the biggest retailers in the United States
Overview of Target's 4th quarter 2019 earnings report
Data below refers to the latest quarters data unless specified otherwise:
- Total Revenue: $23.398 billion (up from $22.977 billion for the same quarter of the previous year)
- Revenue increased by 1.8% over the last 12 months
- Cost of sales: $17.056 billion (up from $16.900 billion for the same quarter of the previous year)
- Cost of sales increased by 0.9% over the last 12 months
- Margin gains for Target Corporation as their total revenues increased at a faster rate than their cost of sales
- Net earnings: $834 million (up 4.4% from $799 million for the same quarter of the previous year)
- Diluted earnings per share: $1.63 (up from $1.52 for the same quarter of the previous year)
- PE ratio of Target: 15.9
- Cash dividends per share: $ 0.66 (up from $ 0.64 for the same quarter of the previous year)
- Dividend yield of Target Corporation: 2.7%
- Diluted number of shares in issue: 511.9 million (down -2.4% from 524.3 million for the same quarter of the previous year)
- Cash and cash equivalents: $2.577 billion
- Cash and cash equivalents per share: $5.03
- Cash and cash equivalents makes up 5.2% of Target's market capital
- Cash and cash equivalents makes up 6% of Target's total assets
- Inventories: $8.992 billion
- Inventories makes up 21% of Target's total assets
- Total stockholders equity in Target Corporation: $11.833 billion
- Stockholders equity per share: $23.11
- Target is trading at 4.18 times its stockholders equity per share, which is well outside the expected range of between 2 and 4 times that most firms tend to trade at
- The price to book value of the S&P 500 is currently at 3.34 (Read more about the S&P 500 here)
- Cash generated from operations (for the full fiscal 2019): $3.269 billion
- Cash generated from operations per share (for the full fiscal 2019): $6.39
Target's management commentary on their 4th quarter 2019 earnings report and guidance
MINNEAPOLIS, March 3, 2020 /PRNewswire/ --
Target Corporation (NYSE: TGT) today announced its fourth-quarter and full-year 2019 results. The Company reported GAAP earnings per share (EPS) from continuing operations of $1.63 in fourth quarter and $6.34 for full-year 2019, compared with $1.52 and $5.50 in 2018, respectively. Fourth quarter Adjusted EPS were $1.69 and full-year Adjusted EPS were $6.39, compared with $1.53 and $5.39 in 2018, respectively. The attached tables provide a reconciliation of non-GAAP to GAAP measures. All earnings per share figures refer to diluted EPS.
"With eleven consecutive quarters of positive comparable sales growth, driven by healthy performance in both our stores and digital channels, Target's results demonstrate that we've built a sustainable business model that drives strong topline growth and consistent bottom line performance," said Brian Cornell, Chairman and CEO of Target. "The strategic investments we've made over the past several years to elevate the shopping experience, curate our multi-category assortment at scale, and deliver ease and convenience through our fulfillment capabilities are deepening our relationship with our guest. As we look ahead to 2020 and beyond, we are well positioned to build on this strong foundation to further differentiate Target and drive long-term, profitable growth."
Target Corporation (NYSE: TGT) today announced its fourth-quarter and full-year 2019 results. The Company reported GAAP earnings per share (EPS) from continuing operations of $1.63 in fourth quarter and $6.34 for full-year 2019, compared with $1.52 and $5.50 in 2018, respectively. Fourth quarter Adjusted EPS were $1.69 and full-year Adjusted EPS were $6.39, compared with $1.53 and $5.39 in 2018, respectively. The attached tables provide a reconciliation of non-GAAP to GAAP measures. All earnings per share figures refer to diluted EPS.
"With eleven consecutive quarters of positive comparable sales growth, driven by healthy performance in both our stores and digital channels, Target's results demonstrate that we've built a sustainable business model that drives strong topline growth and consistent bottom line performance," said Brian Cornell, Chairman and CEO of Target. "The strategic investments we've made over the past several years to elevate the shopping experience, curate our multi-category assortment at scale, and deliver ease and convenience through our fulfillment capabilities are deepening our relationship with our guest. As we look ahead to 2020 and beyond, we are well positioned to build on this strong foundation to further differentiate Target and drive long-term, profitable growth."
Fiscal 2020 Guidance
In first quarter 2020, Target expects a low-single digit increase in comparable sales and a mid-single digit increase in operating income. The Company expects both GAAP EPS from continuing operations and Adjusted EPS of $1.55 to $1.75.
For full-year 2020, Target expects a low-single digit increase in comparable sales and a mid-single digit increase in operating income. The Company expects both GAAP EPS from continuing operations and Adjusted EPS of $6.70 to $7.00.
First quarter and full-year 2020 GAAP EPS from continuing operations may include the impact of certain discrete items, which will be excluded in calculating Adjusted EPS. The Company is not currently aware of any such discrete items.
In first quarter 2020, Target expects a low-single digit increase in comparable sales and a mid-single digit increase in operating income. The Company expects both GAAP EPS from continuing operations and Adjusted EPS of $1.55 to $1.75.
For full-year 2020, Target expects a low-single digit increase in comparable sales and a mid-single digit increase in operating income. The Company expects both GAAP EPS from continuing operations and Adjusted EPS of $6.70 to $7.00.
First quarter and full-year 2020 GAAP EPS from continuing operations may include the impact of certain discrete items, which will be excluded in calculating Adjusted EPS. The Company is not currently aware of any such discrete items.
Target Corporation (NYSE: TGT) stock price history
The image below, obtained from Google shows Target's stock chart for the last 5 years. It's been an ok time for Target stockholders over the last 5 years. 5 years ago the stock of Target was trading at around $81.30 and its currently trading at $96.61. Thats a 18.8% return provided to Target stockholders over the last 5 years.
The stock of Target is trading at close to the mid point between its 52 week low and 52 week high which to us is a clear indication that the short term sentiment and momentum of Target's stock price is neutral at this point in time. The stock has suffered a significant decline in recent weeks, as has most in the global market sell off triggered by Coronavirus fears. Read more about the recent market sell off's here.
The stock of Target is trading at close to the mid point between its 52 week low and 52 week high which to us is a clear indication that the short term sentiment and momentum of Target's stock price is neutral at this point in time. The stock has suffered a significant decline in recent weeks, as has most in the global market sell off triggered by Coronavirus fears. Read more about the recent market sell off's here.
Target (NYSE:TGT) stock price history over the last 5 years
Recent coverage of Target
The extract below discusses the latest regarding Target as obtained from TheStreet.com
Target (TGT) - Get Report shares have been under pressure lately, which comes as little surprise given the volatility in the overall market. Investors have looked to the Minneapolis retailer as a leader, one of the few that could not only survive but thrive in an Amazon-led (AMZN) e-commerce environment.
That’s why when the company reported mixed quarterly results, it caught investors off-guard. Earnings of $1.69 a share beat estimates by 3 cents, but revenue of $23.4 billion missed expectations slightly as sales grew just 1.8% from a year earlier. Further, comparable-store sales growth of just 1.5% missed estimates of 2.1%. Gross margin widened year-over-year but fell short of consensus expectations, as did operating margin. First-quarter and full-year earnings guidance was mostly in line with expectations but was far from inspiring overwhelming confidence. Target stock had gotten into a trend, rising big on earnings, consolidating the gains and rising again on earnings a few months later.
Read the full article here
Target (TGT) - Get Report shares have been under pressure lately, which comes as little surprise given the volatility in the overall market. Investors have looked to the Minneapolis retailer as a leader, one of the few that could not only survive but thrive in an Amazon-led (AMZN) e-commerce environment.
That’s why when the company reported mixed quarterly results, it caught investors off-guard. Earnings of $1.69 a share beat estimates by 3 cents, but revenue of $23.4 billion missed expectations slightly as sales grew just 1.8% from a year earlier. Further, comparable-store sales growth of just 1.5% missed estimates of 2.1%. Gross margin widened year-over-year but fell short of consensus expectations, as did operating margin. First-quarter and full-year earnings guidance was mostly in line with expectations but was far from inspiring overwhelming confidence. Target stock had gotten into a trend, rising big on earnings, consolidating the gains and rising again on earnings a few months later.
Read the full article here
A few of Target's shopping locations
Target (NYSE: TGT) latest stock valuation
So what do we value Target Corporation's stock at based on their 4th quarter 2019 earnings report and their fiscal guidance provided? Based on Target Corporation's earnings report and the fiscal guidance provided our valuation model provides a target (full value) price for Target Corporation' stock at $108.50 (down slightly from our 3rd quarter 2019 earnings valuation of Target Corporation) We therefore believe the stock of Target Corporation's is undervalued at its current price. The market sell off has created a great opportunity to buy a quality stock at an excellent price
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $108.50. A good entry point into Target would therefore be at $97.70 or below. We expect the stock of Target to kick up in coming weeks and months, once the fears surrounding markets subsides and fades away and the markets returns to normal.
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $108.50. A good entry point into Target would therefore be at $97.70 or below. We expect the stock of Target to kick up in coming weeks and months, once the fears surrounding markets subsides and fades away and the markets returns to normal.
Next earnings release of Target
It is expected that Target will release their 1st quarter 2020 earnings report in late June 2020