Target Corporation

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Target Corporation (NYSE: TGT) is a general merchandise retailer selling products to its guests through its stores and digital channels. The Company offers customers, referred to as guests, everyday essentials and fashionable, differentiated merchandise at discounted prices. The majority of its stores offer a wide assortment of general merchandise and food. Its merchandise categories include apparel and accessories, beauty and household essentials, food and beverage, hardlines, and home furnishings and decor. 

Kalkine’s Low Carbon Research Report covers the Investment Highlights, Low Carbon Emission Initiatives, Key Financial Metrics, Risks, and Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

Stock Performance:

• The stock has corrected by 4.26% in the last three months, similarly a correction of 26.76% in past six months.
• The stock is near to lower levels of its 52-week range of USD 167.40 and 52-week low price of USD 87.35. Post the announcement of Q1FY25 results the stock has given a return of approx. 1.43%, with the current price expected to take support from important levels of USD 90-USD 95.
• The price is currently trading between both its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of 56.03.

1.2 Why do Low Carbon Emissions matter?

The shift toward a low-carbon economy is one of the most significant challenges of current time, spurred by the urgent need to combat climate change and reduce the environmental impact of corporate activities. This report covers the US-listed low-carbon emission company Target Corporation (NYSE: TGT), that is committed to sustainability and responsible environmental practices.

Carbon and Waste Management - Key Metrics

CO₂ emissions dropped significantly from 31.15 in 2020 to 20.37 in 2022, with a slight uptick to 21.35 by 2024. Similarly, water usage decreased steadily from 140.6 to 100.9 over the same period. These figures indicate notable improvements in environmental efficiency, although the minor rise in CO₂ emissions after 2022 suggests the need for renewed focus on carbon reduction initiatives to maintain progress.

Peer Comparison: Carbon Emission and Waste Management Metrics

1.3 The Key Positives, Negatives, and Investment summary

1.4 Top 10 shareholders:

The top 10 shareholders together form ~36.58% of the total shareholding, signifying concentrated shareholding. The Vanguard Group, Inc. and State Street Global Advisors (US) are the biggest shareholders, holding the maximum stake in the company at 10.00% and 7.75%, respectively.

1.4 Key Metrics

Target Corporation’s Q1 FY25 financial performance reflects a mixed but resilient outlook amidst a challenging retail environment, with key metrics indicating operational improvements despite macroeconomic pressures. The gross profit margin slightly declined to 25.4% from 26.4% in Q1 FY24, driven by higher markdowns and digital fulfillment costs, though partially offset by lower inventory shrink. However, significant gains in profitability metrics highlight operational efficiency, with the EBITDA margin rising to 12.0% from 8.2% and the operating margin improving to 8.7% from 5.3%, largely due to a USD593 million litigation settlement gain and disciplined cost management. The net margin increased to 4.3% from 3.8%, supported by a 5.8% income before tax margin (up from 5.0%), despite a higher income tax rate of 25.0% compared to 22.7%. Free cash flow yield improved to 7.9% from 6.3% on a trailing twelve-month (TTM) basis, underscoring strong cash generation, while TTM returns on average common equity (29.1% vs. 32.5%), total assets (7.5% vs. 7.7%), and invested capital (14.9% vs. 15.7%) saw slight declines, reflecting sales pressures and an 11% inventory increase.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

 2.2 Insights of Q1FY25:

Section 3: Key Risks & Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

• The stock has corrected by 4.26% in the last three months, similarly a correction of 26.76% in past six months.
• The stock is near to lower levels of its 52-week range of USD 167.40 and 52-week low price of USD 87.35. Post the announcement of Q1FY25 results the stock has given a return of approx. 1.43%, with the current price expected to take support from important levels of USD 90-USD 95.
• The price is currently trading between both its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of 56.03.

 4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings Per Share Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is June 27, 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.