Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year, growth in earnings per share and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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Highlights from the ratings report include:
- TGT's revenue growth has slightly outpaced the industry average of 1.3%. Since the same quarter one year prior, revenues slightly increased by 3.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- TARGET CORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TARGET CORP increased its bottom line by earning $4.29 versus $4.01 in the prior year. This year, the market expects an improvement in earnings ($4.38 versus $4.29).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Multiline Retail industry average. The net income has remained constant at $704.00 million when compared to the same quarter one year ago.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Multiline Retail industry and the overall market, TARGET CORP's return on equity exceeds that of both the industry average and the S&P 500.
Target Corporation operates general merchandise stores in the United States. The company has a P/E ratio of 14.4, equal to the average retail industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Target has a market cap of $41.19 billion and is part of the services sector and retail industry. Shares are up 23.1% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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