NEW YORK (TheStreet) -- Shares of Target Corp. (TGT - Get Report) are lower by -0.62% to $61. in pre-market trade after the company named PepsiCo (PEP - Get Report) executive Brian Cornell as its new CEO, turning to an outsider for the first time in its history to repair a battered corporate culture and lead the company forward as American shopping habits change, the Wall Street Journal reports.
TheStreet Ratings team rates TARGET CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate TARGET CORP (TGT) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and poor profit margins."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TGT's revenue growth has slightly outpaced the industry average of 6.8%. Since the same quarter one year prior, revenues slightly increased by 2.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.85, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- TARGET CORP's earnings per share declined by 14.3% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, TARGET CORP reported lower earnings of $3.07 versus $4.53 in the prior year. This year, the market expects an improvement in earnings ($3.67 versus $3.07).
- The gross profit margin for TARGET CORP is currently lower than what is desirable, coming in at 29.23%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.45% trails that of the industry average.
- Net operating cash flow has significantly decreased to $520.00 million or 83.90% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, TARGET CORP has marginally lower results.
- You can view the full analysis from the report here: TGT Ratings Report