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
WACCMarket 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)
 WACCBook   6.42%  6.17%
Enterprise value
EVMarket 53,986 46,567 EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash
 EVBook   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.
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

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/FCFOPS

\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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