Investment Thesis
Target demonstrates solid operational efficiency with strong profitability metrics (22.9% ROE, 6.2% ROA) and excellent interest coverage (48.3x), but faces headwinds from declining revenue (-1.7% YoY) and weakening net income (-9.4% YoY). The company's liquidity position is strained with a current ratio of 0.94x and minimal cash reserves, requiring close monitoring alongside modest free cash flow generation.
TGT Strengths
- Exceptional return on equity (22.9%) and solid return on assets (6.2%) indicate efficient capital deployment
- Strong interest coverage ratio (48.3x) demonstrates robust ability to service debt obligations
- Healthy operating cash flow of $6.6B with positive free cash flow of $2.8B provides financial flexibility
- Moderate leverage (0.89x debt/equity) maintains balance sheet stability
TGT Risks
- Revenue contraction (-1.7% YoY) signals top-line weakness in competitive retail environment
- Net income decline (-9.4% YoY) outpacing revenue decline suggests margin compression or cost control challenges
- Weak liquidity position with current ratio below 1.0x (0.94x) and minimal cash reserves ($250M) limits short-term flexibility
- High long-term debt of $14.4B relative to stockholders' equity ($16.2B) constrains financial flexibility
- Low quick ratio (0.36x) indicates potential working capital stress if operational challenges persist
Key Metrics to Watch
- Revenue growth trajectory and same-store sales trends to assess market share stability
- Operating margin sustainability as cost pressures may persist in inflationary environment
- Free cash flow generation and capital expenditure levels relative to debt service requirements
- Current ratio and working capital management to ensure liquidity adequacy
- Net income recovery path and operating leverage improvement opportunities
TGT Financial Metrics
TGT Profitability Ratios
TGT Balance Sheet & Liquidity
TGT 5-Year Financial Trend
5-Year Trend Summary: TARGET CORP's revenue has shown modest growth of 1% over the 5-year period. The most recent EPS of $8.94 reflects profitable operations.
TGT Growth Metrics (YoY)
TGT Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $25.3B | $689.0M | $1.51 |
| Q2 2025 | $25.2B | $854.0M | $2.05 |
| Q1 2025 | $23.8B | $854.0M | $2.03 |
| Q3 2024 | $25.4B | $835.0M | $1.85 |
| Q2 2024 | $24.8B | $835.0M | $1.80 |
| Q1 2024 | $24.5B | $835.0M | $2.03 |
| Q3 2023 | $25.4B | $183.0M | $1.54 |
| Q2 2023 | $24.8B | $183.0M | $0.39 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
TGT Capital Allocation
TGT SEC Filings
Access official SEC EDGAR filings for TARGET CORP (CIK: 0000027419)