TGT

Target Corp

Consumer


Presented:08/15/2016
Price:$75.53
Cap:$45.61B
Current Price:$160.69
Cap:$74.03B

Presented

Date08/15/2016
Price$75.53
Market Cap$45.61B
Ent Value$58.19B
P/E Ratio13.95x
Book Value$21.13
Div Yield0.03%
Shares O/S603.80M
Ave Daily Vol6,253,802
Short Int6.30%

Current

Price$160.69
Market Cap$74.03B
Target Corp. engages in owning and operating of general merchandise stores. It also operates SuperTarget stores with a line of food and general merchandise items and offers an assortment of general merchandise, including many items found in the company's stores and a complementary assortment, such as extended sizes and colors, sold only online. The company was founded by George Draper Dayton in 1902 and is headquartered in Minneapolis, MN.

Please note, Target’s Q2 2016 earnings call is scheduled for today at 8:00 AM ET.

Publicly traded companies mentioned herein: Amazon.com Inc (AMZN), Target Corp (TGT), Wal-Mart Inc (WMT)

Highlights

Target (TGT) is in the unenviable position of being caught between Wal-Mart and Amazon right now in the increasingly competitive discount retail space, and the presenter sees recent missteps by its management team leading to subpar results going forward. He is short the stock at $75 and sees downside risk to $60 over the next 12-24 months based on: persistent margin pressure, an earnings reset that he believes will be necessary during the investment horizon, and a contraction of the multiple (from ~15x to 13x - 14x normalized earnings). Overall, the retail environment is not going to get any easier for TGT as margins will face “huge pressure” due to Amazon continuing to bring down the level of profits for everyone.

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Idea Discussion

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