Target Corporation

Methodology

Target's fair value calculation works reasonably well given the company's consistent profitability and moderate growth profile, though investors should normalize for occasional margin pressures from inventory issues or competitive dynamics. The method captures Target's position as a stable retailer with predictable earnings power, though it may undervalue the company's real estate portfolio and omnichannel capabilities. Fair value estimates are most reliable when using mid-cycle margins rather than peak or trough results.

Methodology

Target typically commands moderate PEG ratios reflecting its position as a stable, slow-growth retailer with strong competitive positioning in the discount segment. The PEG framework works well for Target because growth rates are relatively predictable, though investors should watch for margin pressures that can temporarily elevate the ratio. Comparing Target's PEG to Walmart and other discount retailers provides useful context for relative valuation.

Methodology

Target's meaningful dividend yield significantly enhances PEGY analysis, reflecting management's commitment to steady shareholder returns alongside modest growth. The combination of stable low-single-digit growth and a substantial dividend makes PEGY particularly relevant, as total return includes both capital appreciation and income. For income-focused investors, PEGY captures Target's balanced approach between growth investment and consistent cash returns.