No-moat Target’s fiscal 2024 first-quarter results landed mostly in line with our expectations and we do not plan to alter our $136 fair value estimate materially. Shares trade in fairly valued territory after shedding about 7% in early trading on May 22.
Given its iconic brand that attracts consumers due to its promise of a more gratifying customer experience compared with other low-cost retailers, we are confident in Target’s ability to drive recurring foot traffic.
Target lacks the scale and differentiation to drive significant market share across its product categories, since its product offerings lack a clear value proposition.
|
Metric
|
TGT
|
WMT
|
DLTR
|
|---|---|---|---|
Price/Earnings (Normalized) | 16.26 | 29.51 | 19.42 |
Price/Book Value | 4.85 | 6.47 | 3.41 |
Price/Sales | 0.63 | 0.80 | 0.82 |
Price/Cash Flow | 8.85 | 15.16 | 11.27 |
|
Metric
|
TGT
|
WMT
|
DLTR
|
|---|---|---|---|
Quick Ratio | 0.27 | 0.20 | 0.15 |
Current Ratio | 0.91 | 0.83 | 1.31 |
Interest Coverage | 11.55 | 8.94 | −8.26 |
|
Metric
|
TGT
|
WMT
|
DLTR
|
|---|---|---|---|
Return on Assets (Normalized) | 8.02% | 6.48% | 5.59% |
Return on Equity (Normalized) | 35.66% | 20.75% | 15.04% |
Return on Invested Capital (Normalized) | 15.13% | 12.00% | 7.27% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|
WMT
| Walmart Inc | Tdhkhwfc | Cydx | $526.9 Bil | |
COST
| Costco Wholesale Corp | Tgsrntfxmf | Tyqfw | $359.1 Bil | |
WMMVY
| Wal - Mart de Mexico SAB de CV ADR | — | Fjqwb | $68.0 Bil | |
WMMVF
| Wal - Mart de Mexico SAB de CV | — | Xzfb | $68.0 Bil | |
DG
| Dollar General Corp | Dkzvhsnw | Yvzhv | $31.9 Bil | |
DLMAF
| Dollarama Inc | — | Ymjp | $25.3 Bil | |
DLTR
| Dollar Tree Inc | Swjlvjqs | Fzrvf | $25.2 Bil | |
DQJCY
| Pan Pacific International Holdings Corp ADR | — | Fcpk | $15.2 Bil | |
BJ
| BJ's Wholesale Club Holdings Inc | — | Vmxrrc | $11.7 Bil |
