Target Corp: Financial Analysis

2786 Words May 21st, 2013 12 Pages
Target Corporation:
A Financial & Competitive Analysis
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By:

O.P.

For
Econ 2304 Prof. Alexander

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Overview

Target has been a publicly traded company since 1963, but has been around since 1902. Target was originally part of the Dayton Hudson Corporation which was founded in Minneapolis, Minnesota. In 2000, because Target had become the largest division of the Dayton Hudson Corporation, it became known as the Target Corporation.

Target is the second largest discount retailer in the United States, behind Wal-Mart. The company is also ranked number thirty on the Fortune 500, and is part of the Standard & Poor’s 500 index. Target operates about 1,750 Target and Super Target stores in 49 states,
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2010 overall was a very good year posting its second highest numbers this decade and third highest in the last 20 years.

“Target Corporation’s efficient marketing, multi-channel strategy, product innovation, compelling pricing strategy and new merchandise assortments, should help drive comparable-store sales and operating margins in the long term. We expect the company to gain market share, and believe that more focus on consumable items should boost sales and earnings in a sluggish consumer environment. (Zacks 1)” Zacks’ investment research analysis of the Target stock going forward indicates that Target focusing on consumable items, such as the food section in a Super-Target, could help benefit Target financially.

“Retailers like Target and Wal-Mart were “definitely on the rebound,” according John Challenger, CEO of the firm in charge of the report. “[It] indicates that consumers are ready to start spending again,” he noted. (Fontevecchia 1)” Taken from an article noting that 2011 saw the fewest job cuts since 1993. Even nationally Target is being noted as having an improvement in their performance. Targets biggest competitor Wal-Mart is ranked 14th on the 2010 Forbes top 2000 companies. Wal-Mart posted financial numbers of 421.849 billion in sales, 16.993 billion in profit, and 180.663 in assets. However Wal-Mart's profit margin is 4.0%; 0.3% less than Target, and has a price to sale ratio of 0.43.
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