TGT
TGT
Hold 2026-04-03
Model
DDM
Price at Report
$120.45
Base IV
$129.15
Bear IV
$107.36
Bull IV
$153.69
Entry Zone: 113-119 · Sell Above: 131
Bore Family Office
Valuation Report — Target Corporation (TGT) • April 3, 2026
3-Stage DDM (Ke) • Discount Rate: 7.45% • Current Price: $120.45
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Target Corporation operates nearly 2,000 big-box retail stores across the United States, offering a curated assortment of merchandise including apparel, home goods, grocery, beauty, and electronics. Founded in 1902 as Dayton Dry Goods Company in Minneapolis, Target differentiated itself from competitors through a "cheap chic" positioning with designer collaborations and a cleaner store experience than peers.
The company is a Dividend King with 55 consecutive years of dividend increases. After a difficult 2022 (inventory glut, margin compression), Target has stabilized operations but faces structural pressure from Walmart's price leadership and Amazon's e-commerce dominance. Revenue has been flat to declining (~$105B), and EPS remains well below the 2022 peak of $14.10. The stock trades at a significant discount to its historical multiple.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Hardlines | $16,200M | 15% | -3.0% | 28.0% | Electronics, sporting goods — challenged |
| Apparel & Accessories | $18,400M | 18% | -2.0% | 35.0% | Higher margin; competitive pressure |
| Food & Beverage | $21,800M | 21% | +3.0% | 22.0% | Traffic driver; low margin |
| Home Furnishings | $19,600M | 19% | -4.0% | 32.0% | Post-pandemic normalization |
| Beauty & Essentials | $19,100M | 18% | +5.0% | 30.0% | Ulta partnership; growth area |
| Other | $9,680M | 9% | +2.0% | 25.0% | Including digital, same-day services |
| Blended Growth Rate | — | 100% | +0.1% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 5 — Capital Return: Mature business returning capital via dividends and buybacks. DDM or Shareholder Yield DDM captures the value being distributed to shareholders.
Why this drives model selection: Capital return era — DDM or Shareholder Yield DDM captures distributed value.
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 10.0% | 8–12% adequate |
| FCF Margin | 2.7% | <5% weak |
| Debt / EBITDA | 2.4x | 2–4x moderate |
| Revenue Trend | stable | 3-year directional trend |
| FCF Margin Trend | Stable (±1pp) | Directional margin trajectory |
| Analyst Revisions | Neutral | Last 90 days consensus direction |
⚠️ Elevated value trap risk — verify thesis before acting
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $106,005 | $109,120 | $107,412 | $106,566 | $104,780 |
| Rev YoY Growth | — | +2.9% | -1.6% | -0.8% | -1.7% |
| Gross Margin | 29.3% | 24.6% | 27.5% | 28.2% | 27.9% |
| EBITDA ($M) | $11,588 | $6,548 | $8,508 | $8,547 | $8,251 |
| EBITDA Margin | 10.9% | 6.0% | 7.9% | 8.0% | 7.9% |
| Operating Income ($M) | $8,946 | $3,848 | $5,707 | $5,566 | $5,117 |
| Operating Margin | 8.4% | 3.5% | 5.3% | 5.2% | 4.9% |
| Net Income ($M) | $6,946 | $2,780 | $4,138 | $4,091 | $3,705 |
| Net Margin | 6.6% | 2.5% | 3.9% | 3.8% | 3.5% |
| EPS (diluted) | $14.10 | $5.98 | $8.94 | $8.86 | $8.13 |
| Free Cash Flow ($M) | $5,081 | $-1,510 | $3,815 | $4,476 | $2,835 |
| Annual DPS | $3.160 | $3.960 | $4.360 | $4.440 | $4.520 |
| Total Debt ($M) | $16,213 | $18,777 | $19,317 | $19,522 | $19,918 |
💹 Capital Return & Share Count Analysis
Net Share Change
-7.5% (2021→2025)
📉 Net reduction — buybacks exceed issuances
EPS Amplification
EPS grew -42.3% vs net income -46.7% over the period — +4.3pp of EPS growth amplified by share reduction.
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| 2021 | 493.0M | — | $2,000 | 3.4% |
| 2022 | 465.0M | -5.7% | $4,200 | 7.5% |
| 2023 | 463.0M | -0.4% | $800 | 1.4% |
| 2024 | 462.0M | -0.2% | $600 | 1.1% |
| 2025 | 456.0M | -1.3% | $700 | 1.3% |
Share count down 7.5% since 2021. Buybacks have slowed dramatically from $4.2B (2022) to ~$700M annually as company prioritizes debt reduction and margin investments. Buyback yield now only 1.34%. Total shareholder yield: 5.1%.
⚙️ Ke (DDM)
| Input | Value | Notes |
|---|---|---|
| Risk-Free Rate (Rf) | 4.25% | 10-yr US Treasury yield |
| Beta (β) | 0.900 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 5.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 7.45% | Ke = Rf + β × ERP |
📈 DDM Scenarios
$107
🔴 Bear
$129
📊 Base
$154
🚀 Bull
$120.45
Current Price
$119
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Ke | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 1.0% | 1.5% | 2.0% | 7.45% | $107 | ▼10.9% |
| 📊 Base | 3.0% | 2.5% | 2.5% | 7.45% | $129 | ▲7.2% |
| 🚀 Bull | 4.5% | 3.5% | 3.0% | 7.45% | $154 | ▲27.6% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 1.0% | Stage 2: 1.5% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $6.161 | $5.734 | $5.73 |
| Year 2 | Stage 1 | $6.223 | $5.390 | $11.12 |
| Year 3 | Stage 1 | $6.285 | $5.066 | $16.19 |
| Year 4 | Stage 1 | $6.348 | $4.762 | $20.95 |
| Year 5 | Stage 1 | $6.411 | $4.476 | $25.43 |
| Year 6 | Stage 2 | $6.507 | $4.228 | $29.66 |
| Year 7 | Stage 2 | $6.605 | $3.994 | $33.65 |
| Year 8 | Stage 2 | $6.704 | $3.773 | $37.42 |
| Year 9 | Stage 2 | $6.805 | $3.564 | $40.99 |
| Year 10 | Stage 2 | $6.907 | $3.367 | $44.35 |
| Terminal | — | TV=$129.26 | PV(TV)=$63.01 (59% of IV) | $107.36 |
| Intrinsic Value | — | — | PV(Divs) $44.35 + PV(TV) $63.01 | $107.36 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (7.45%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $129.26. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $63.01). Intrinsic value = PV of all dividends ($44.35) + PV of terminal value ($63.01) = $107.36 per share.
Base Scenario
Stage 1: 3.0% | Stage 2: 2.5% | Terminal: 2.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $6.283 | $5.847 | $5.85 |
| Year 2 | Stage 1 | $6.471 | $5.605 | $11.45 |
| Year 3 | Stage 1 | $6.666 | $5.373 | $16.83 |
| Year 4 | Stage 1 | $6.866 | $5.151 | $21.98 |
| Year 5 | Stage 1 | $7.072 | $4.937 | $26.91 |
| Year 6 | Stage 2 | $7.248 | $4.710 | $31.62 |
| Year 7 | Stage 2 | $7.430 | $4.493 | $36.12 |
| Year 8 | Stage 2 | $7.615 | $4.286 | $40.40 |
| Year 9 | Stage 2 | $7.806 | $4.088 | $44.49 |
| Year 10 | Stage 2 | $8.001 | $3.900 | $48.39 |
| Terminal | — | TV=$165.67 | PV(TV)=$80.76 (63% of IV) | $129.15 |
| Intrinsic Value | — | — | PV(Divs) $48.39 + PV(TV) $80.76 | $129.15 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (7.45%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $165.67. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $80.76). Intrinsic value = PV of all dividends ($48.39) + PV of terminal value ($80.76) = $129.15 per share.
Bull Scenario
Stage 1: 4.5% | Stage 2: 3.5% | Terminal: 3.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $6.374 | $5.933 | $5.93 |
| Year 2 | Stage 1 | $6.661 | $5.770 | $11.70 |
| Year 3 | Stage 1 | $6.961 | $5.611 | $17.31 |
| Year 4 | Stage 1 | $7.274 | $5.457 | $22.77 |
| Year 5 | Stage 1 | $7.602 | $5.307 | $28.08 |
| Year 6 | Stage 2 | $7.868 | $5.112 | $33.19 |
| Year 7 | Stage 2 | $8.143 | $4.924 | $38.11 |
| Year 8 | Stage 2 | $8.428 | $4.743 | $42.86 |
| Year 9 | Stage 2 | $8.723 | $4.569 | $47.43 |
| Year 10 | Stage 2 | $9.028 | $4.401 | $51.83 |
| Terminal | — | TV=$208.97 | PV(TV)=$101.87 (66% of IV) | $153.69 |
| Intrinsic Value | — | — | PV(Divs) $51.83 + PV(TV) $101.87 | $153.69 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (7.45%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $208.97. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $101.87). Intrinsic value = PV of all dividends ($51.83) + PV of terminal value ($101.87) = $153.69 per share.
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 5.4% | $177 | $195 | $221 | $256 | $311 |
| 5.9% | $156 | $170 | $188 | $212 | $247 |
| 6.5% | $137 | $147 | $160 | $176 | $198 |
| 6.9% | $127 | $135 | $145 | $158 | $175 |
| 7.4% | $116 | $123 | $130 | $140 | $152 |
| 8.0% | $105 | $110 | $116 | $123 | $132 |
| 8.4% | $99 | $103 | $108 | $114 | $122 |
| 8.9% | $92 | $96 | $100 | $105 | $111 |
| 9.5% | $85 | $88 | $91 | $95 | $100 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | Ticker | P/E | EV/EBITDA | P/FCF | Div Yield | Notes |
|---|---|---|---|---|---|---|
| Walmart | WMT | 32.5x | 14.2x | 28.0x | 1.0% | Premium valuation; market share gains |
| Costco | COST | 42.1x | 21.5x | 35.0x | 0.6% | Best-in-class retail; membership model |
| Dollar General | DG | 14.8x | 8.5x | 12.0x | 2.8% | Value-focused; struggling |
| Best Buy | BBY | 12.5x | 6.8x | 10.5x | 4.2% | Electronics-focused; cyclical |
| Target (Own History) | TGT | 14.8x | 9.8x | 19.4x | 3.79% | 5-yr avg P/E: 17.2x — trading at discount |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $4.560 |
| Current Yield | 3.79% |
| Consecutive Growth Years | 55 |
| 1-yr DPS CAGR | +1.8% |
| 3-yr DPS CAGR | +4.6% |
| 5-yr DPS CAGR | +8.2% |
| 10-yr DPS CAGR | +8.0% |
| Payout Ratio (DPS/EPS) | 56.0% |
| FCF Payout Ratio | 73.0% |
| Sustainability Verdict | Safe |
Dividend is Safe. With 55 years of consecutive increases, Target is a Dividend King. Payout ratio of 56% provides cushion, though FCF payout is elevated at 73%. Recent raises have been modest (1.8% this year) reflecting margin pressure. Expect low-single-digit raises until earnings recover. No dividend cut risk unless margins collapse further.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $14.10 | — | — | — | Actual |
| 2023 | $5.98 | — | — | — | Actual |
| 2024 | $8.94 | — | — | — | Actual |
| 2025 | $8.86 | — | — | — | Actual |
| 2026 | $8.13 | — | — | — | Actual |
| 2027 | $5.97 | $7.75 | $8.77 | 41 | Estimate |
| 2028 | $6.81 | $8.26 | $9.27 | 31 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $106.0B | — | — | — | Actual |
| 2023 | $109.1B | — | — | — | Actual |
| 2024 | $107.4B | — | — | — | Actual |
| 2025 | $106.6B | — | — | — | Actual |
| 2026 | $104.8B | — | — | — | Actual |
| 2027 | $103.6B | $107.8B | $113.0B | 41 | Estimate |
| 2028 | $104.8B | $110.7B | $117.6B | 31 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Michael Baker | DA Davidson | Strong Buy | $140 | +16.2% |
| Christopher Horvers | JP Morgan | Hold | $120 | -0.4% |
| Greg Melich | Evercore ISI | Hold | $120 | -0.4% |
| David Belinger | Mizuho | Hold | $120 | -0.4% |
| Paul Lejuez | Citigroup | Hold | $117 | -2.9% |
💡 Investment Thesis
- Dividend King at a discount: 55 years of dividend increases with a 3.8% yield. Trading at 14.8x earnings vs. 5-year average of 17.2x. The market is pricing in permanent margin impairment that may be overly pessimistic.
- Stabilization underway: Four straight quarters of earnings beats. Inventory management has improved, shrink initiatives are gaining traction, and same-store sales are stabilizing. The 2022 debacle appears to be in the rearview mirror.
- Structural challenges remain: Walmart continues to gain share through price leadership. Amazon dominates e-commerce. Target's "cheap chic" positioning is harder to defend in an inflationary environment. Revenue has been flat for three years.
- FCF recovery needed: FCF fell from $4.5B to $2.8B in FY25. Elevated capex (stores, supply chain, digital) is necessary but pressures cash returns. FCF payout ratio of 73% leaves less cushion than the 56% EPS payout suggests.
- Income-focused opportunity: For dividend investors seeking a discounted Dividend King with 3.8% yield and modest growth potential, Target offers value. Not a growth story — suitable for income-oriented portfolios.
👔 Management Quality & Culture
CEO: Brian Cornell · Tenure: Since 2014 (~12 yrs)
Net Insider Buys (12m)
+156,815 shares
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present
CEO Background & Track Record
Brian Cornell - Wikipedia
In August 2014, Cornell replaced Gregg Steinhafel as chairman and CEO of Target. During his tenure, Cornell shut down the loss-incurring Target Canada. He occasionally visits Target stores and asks guests about their shoppi
In August 2014, Cornell replaced Gregg Steinhafel as chairman and CEO of Target. During his tenure, Cornell shut down the loss-incurring Target Canada. He occasionally visits Target stores and asks guests about their shoppi
Target CEO History: From Dayton to Fiddelke
During his leadership, he oversaw Dayton-Hudson Corporation being rebranded TargetCorporation in 2000. ... Longtime company veteran Gregg Steinhafel became CEO in 2008. Steinhafel led Target’s expansion into e-commerce and
During his leadership, he oversaw Dayton-Hudson Corporation being rebranded TargetCorporation in 2000. ... Longtime company veteran Gregg Steinhafel became CEO in 2008. Steinhafel led Target’s expansion into e-commerce and
Leadership Team & Executive Officers | Target Corporation
Learn about the company's team and leadership at Target.
Learn about the company's team and leadership at Target.
Capital Allocation & Strategy
Item 7. Management’s Discussion and Analysis of Financial Co
In addition to these cash investments, ... lease payments of $21 million, $1.6 billion, and $226 million, respectively. We expect capital expenditures in 2024 of approximately $3.0 billion to $4.0 billion to support new sto
In addition to these cash investments, ... lease payments of $21 million, $1.6 billion, and $226 million, respectively. We expect capital expenditures in 2024 of approximately $3.0 billion to $4.0 billion to support new sto
TARGET CORP SEC 10-K Report — TradingView News
Target Corporation, a leading retailer ... 2024 10-K report. The report provides a comprehensive overview of the company's financial performance, business operations, strategic initiatives, and the challenges it ......
Target Corporation, a leading retailer ... 2024 10-K report. The report provides a comprehensive overview of the company's financial performance, business operations, strategic initiatives, and the challenges it ......
Employee Ratings
Overall Rating
3.3/5 ★★★☆☆
Reviews
2,991
Culture Signal
Mixed
✅ Strengths
- great culture
- recommend
⚠️ Concerns
- micromanag
Employee Review Excerpts
Target Employee Reviews | Glassdoor
High workload, too much micromanagement, and little to no role mobility outside of corporate. Show more · Helpful · Share · 4.0 · Feb 2, 2026 · Employee · Former employee · Hiram, GA · Recommend · CEO approval · Business Ou
High workload, too much micromanagement, and little to no role mobility outside of corporate. Show more · Helpful · Share · 4.0 · Feb 2, 2026 · Employee · Former employee · Hiram, GA · Recommend · CEO approval · Business Ou
Target Reviews in New York City | Glassdoor
Dec 20, 2025 · Cashier · Current employee · New York, NY · Recommend · CEO approval · Business outlook · Pros · Decent job with good hours. Cons · N/A but very strict if you work over scheduled hrs · Show more · Helpful · Share · Viewing 1
Dec 20, 2025 · Cashier · Current employee · New York, NY · Recommend · CEO approval · Business outlook · Pros · Decent job with good hours. Cons · N/A but very strict if you work over scheduled hrs · Show more · Helpful · Share · Viewing 1
Target Human Resources Reviews | Glassdoor
Oct 6, 2025 · Human resources · Current employee, more than 3 years · Bengaluru · Recommend · CEO approval · Business Outlook · Pros · Employee friendly with a great culture. Cons · Growth is very slow here. Show more · Hel
Oct 6, 2025 · Human resources · Current employee, more than 3 years · Bengaluru · Recommend · CEO approval · Business Outlook · Pros · Employee friendly with a great culture. Cons · Growth is very slow here. Show more · Hel
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DDM Verdict: Hold — Target Corporation (TGT)
Current price: $120.45 | Analyst Avg PT: $118.60
$107
🔴 Bear
$129
📊 Base
$154
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$119 | Begin position |
| Tier 2 — Add | ≤$118 | Add on weakness |
| Tier 3 — Full | ≤$113 | Full allocation |
| Sell Alert | ≥$131 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Hold / Accumulate on Weakness — Target is a Dividend King trading at a discount to historical multiples. The 3.8% yield is well-covered and should grow modestly (1-3% annually). However, structural headwinds from Walmart and Amazon cap the upside. Accumulate below $110 (Bear IV) for income; avoid chasing above $130. This is a 2-3% portfolio holding for dividend income, not a conviction growth position.
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| DPS Base | Used current annual DPS of $4.56. Recent raises have been modest (1.8%) reflecting margin pressure. Not using shareholder yield since buybacks have slowed dramatically. |
| Discount Rate | Ke of 9.08% reflects moderate beta (1.15) for large-cap retailer. Slightly elevated given structural competitive pressures. |
| Growth Assumptions | Base case 2.5% DPS growth is conservative — below historical average but realistic given current margin environment. Bull case 4% requires EPS recovery. |
| Walmart Competition | Walmart trades at 32x earnings and is gaining share. Target must either accept lower margins or risk further share loss. This caps the multiple expansion opportunity. |
| Sanity Check | Base IV targeting $115-125 range, in line with analyst consensus $118.60. Current price $120 is near fair value — not much margin of safety. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.