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Target Corporation

TGT
35
Discount Stores · Consumer Defensive
Winston Score
35
Winston is serious
Below-average fundamentals — multiple weak pillars.

Target Corporation runs a chain of large retail stores across the United States where people shop for everyday items like groceries, clothing, electronics, home goods, and beauty products. It serves everyday consumers — families and individuals looking for a mix of affordable prices and decent quality. Target is one of the largest discount retailers in the country, known for its owned brands like Good & Gather (food) and Cat & Jack (kids' clothing), which help set it apart from competitors like Walmart and Amazon.

Target makes money by selling products directly to shoppers in its roughly 1,900 U.S. stores and through its website, keeping a portion of each sale as profit. Its store-as-fulfillment-center model — where stores handle online orders and same-day delivery — gives it an operational edge. However, Target faces real pressure from inflation-cautious consumers trading down to cheaper alternatives, and its relatively thin operating margin of 4.5% leaves little room for error if sales slow or costs rise.

Winston Score History

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-1.5% YoY

YoY Growth Rate

Revenue declining

EPS Growth

-4.5% YoY

YoY Growth Rate

Earnings declining

Insider Activity

0.3%ownership

Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$5.5B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Revenue declining

Target Corporation's revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin
26.6%
Modest — 26.6% gross margin
Operating Margin
4.5%
Thin — 4.5% operating margin
ROCE
4.2%
Weak — 4.2% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY
+4.6%
Slow sales growth (4.6% YoY)
EPS YoY
-14.4%
Earnings shrinking (-14.4% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

EPS Consistency
2/8 quarters
Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion
254%
Turns 254% of profit into real cash
FCF Margin
5.2%
Thin free cash flow (5.2%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity
1.02
Elevated debt (1.02)
Interest Cover
12.17x
Comfortably covers interest (12.2x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)
18.2x
no trend
Fair value — P/E 18.2

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward
+3.9
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (18.2 → 14.3)

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Dividends

Dividend Yield
3.37%
no trend
Moderate income — 3.37% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend Growth
+1.8%
no trend
Dividend flat

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