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 ( TheStreet) -- Target (NYSE: TGT) 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 solid stock price performance, revenue growth and growth in earnings per share. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- Compared to where it was 12 months ago, this stock has enjoyed a nice rise of 26.53% which was in line with the performance of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TGT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 12.3%. Since the same quarter one year prior, revenues slightly increased by 6.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, TARGET CORP increased its bottom line by earning $4.53 versus $4.29 in the prior year. For the next year, the market is expecting a contraction of 1.8% in earnings ($4.45 versus $4.53).
- 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 on the basis of return on equity, TARGET CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The gross profit margin for TARGET CORP is currently lower than what is desirable, coming in at 28.30%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 4.22% is above that of the industry average.
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