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Target Corporation (TGT)

Company Dividend Discount ModelIndustry: Discount StoresSector: Consumer Defensive

Valuation Snapshot

Stable Growth$120.47 - $219.56$161.59
Multi-Stage$125.09 - $136.62$130.75
Blended Fair Value$146.17
Current Price$92.72
Upside57.64%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS9.00%5.44%4.484.404.023.392.942.912.922.932.952.98
YoY Growth--1.74%9.53%18.60%15.26%0.98%-0.37%-0.22%-0.74%-1.03%13.03%
Dividend Yield--4.60%2.79%2.55%1.48%1.42%2.69%3.85%4.12%5.29%3.75%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)3,763.00
(-) Cash Dividends Paid (M)2,050.00
(=) Cash Retained (M)1,713.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)752.60470.38282.23
Cash Retained (M)1,713.001,713.001,713.00
(-) Cash Required (M)-752.60-470.38-282.23
(=) Excess Retained (M)960.401,242.631,430.78
(/) Shares Outstanding (M)456.55456.55456.55
(=) Excess Retained per Share2.102.723.13
LTM Dividend per Share4.494.494.49
(+) Excess Retained per Share2.102.723.13
(=) Adjusted Dividend6.597.217.62
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.44%4.44%5.44%
Fair Value$120.47$161.59$219.56
Upside / Downside29.93%74.27%136.79%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)3,763.003,929.954,104.314,286.414,476.594,675.204,815.46
Payout Ratio54.48%61.58%68.69%75.79%82.90%90.00%92.50%
Projected Dividends (M)2,050.002,420.152,819.123,248.723,710.894,207.684,454.30

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.44%4.44%5.44%
Year 1 PV (M)2,197.092,218.332,239.57
Year 2 PV (M)2,323.392,368.532,414.11
Year 3 PV (M)2,430.672,501.852,574.41
Year 4 PV (M)2,520.562,619.462,721.23
Year 5 PV (M)2,594.582,722.442,855.30
PV of Terminal Value (M)45,041.7647,261.5349,567.97
Equity Value (M)57,108.0559,692.1562,372.59
Shares Outstanding (M)456.55456.55456.55
Fair Value$125.09$130.75$136.62
Upside / Downside34.91%41.01%47.34%

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