Is Target Corporation (TGT) overvalued?
On Equity Rank's model estimate, TGT trades 24% below its fair value. Target Corporation (TGT) last closed at $158.41; the multi-method model fair value is $208.66.
| Price | Model fair value | Price vs model |
|---|---|---|
| $158.41 | $208.66 | 24% below |
What the answer rests on
- 5 of 10 valuation methods put TGT's value above its price and 5 put it below, so the methods disagree.
- To justify today's price, TGT's free cash flow would need to grow about 9.0% a year for ten years (a reverse discounted cash flow).
- TGT trades at 16.9 times its last year's earnings, against a median of 24.3 for 7 profitable Discount Retail companies.
- Over the past year the price sat below the model fair value on 100% of trading days. The gap ranged from 53% below to 24% below the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind TGT's fair value · What prices assume · Other companies