Target Corporation

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker	Analyst	Analyst Email
Jefferies	Daniel Binder	dbinder@jefferies.com
Consumer Edge Research	David A. Schick	dschick@consumeredgeresearch.com
Evercore ISI	Greg Melich	greg.melich@evercoreisi.com
Cowen & Company	Jason H. Seidl	jason.seidl@cowen.com
Buckingham Research	John Zolidis	jzolidis@buckresearch.com
Telsey Advisory Group	Joseph Feldman	jfeldman@telseygroup.com
Daiwa Securities Co. Ltd.	Kahori Tamada	kahori.tamada@us.daiwacm.com
Credit Suisse	Michael Exstein	michael.exstein@credit-suisse.com
Deutsche Bank Research	Paul Trussell	paul.trussell@db.com
CRT Capital Group	Renato Basanta	rbasanta@sterneageecrt.com
Nomura Research	Robert S. Drbul	robert.drbul@nomura.com
Wolfe Research	Scott Mushkin	smushkin@wolferesearch.com
Piper Jaffray	Sean P. Naughton	sean.p.naughton@pjc.com
BMO Capital Markets	Wayne Hood	wayne.hood@bmo.com

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Primary Input Data

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Derived Input Data

Derived Input	Label	2015 Value	2016 Value	Equational Form
Net Operating Profit Less Adjusted Taxes	NOPLAT	3,026	3,606	$NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)$
Free Cash Flow	FCF	4,539	3,750	$FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS$
Tax Shield	TS	213	197	$TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income$
Invested Capital	IC	27,706	25,136	$IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital$
Return on Invested Capital	ROIC	10.92%	14.34%	$ROIC\,=\,\frac { NOPLAT }{ IC }$
Net Investment	NetInv	(843)	(289)	$NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation$
Investment Rate	IR	-27.87%	-8.02%	$IR\,=\,\frac {NetInv}{NOPLAT}$
Weighted Average Cost of Capital	WACC_Market	6.99%	6.83%	$WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)$
Weighted Average Cost of Capital	WACC_Book	6.42%	6.17%
Enterprise value	EV_Market	53,986	46,567	$EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash$
Enterprise value	EV_Book	52,942	44,728
Long-Run Growth	g = IR x ROIC	-3.04%	-1.15%	Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
Long-Run Growth	g = % $\Delta$ GDP	2.50%	2.50%
Margin from Operations	M	6.31%	7.95%	$M\,\,=\,\,\frac{EBIT}{SALES}$
Depreciation/Amortization Rate	D	32.17%	29.14%	$D\,\,=\,\,\frac{D+A}{EBITDA}$

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form	Observed Value		Single-stage multiple g solution		Two-stage valuation model g solution
Equational Form	12/31/2015	12/31/2016	12/31/2015	12/31/2016	12/31/2015	12/31/2016
EV/SALES $\frac {EV}{Sales} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)$	0.73	0.67	2.84%	-1.97%	3.04%	0.10%
EV/EBITDA $\frac {EV}{EBITDA} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)$	7.87	5.95	2.84%	-1.97%	3.04%	0.10%
EV/NOPLAT $\frac {EV}{NOPLAT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}$	17.84	12.92	2.84%	-1.97%	3.04%	0.10%
EV/FCF_OPS $\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	11.89	12.42	2.84%	-1.97%	3.04%	0.10%
EV/EBIT $\frac {EV}{EBIT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	11.59	8.39	2.84%	-1.97%	3.04%	0.10%
EV/IC $\frac {EV}{IC} \,= \,\frac{ROIC\, -\, g}{WACC\,-\,g}$	1.95	1.85	2.84%	-1.97%	3.04%	0.10%

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