Is Target Corporation (TGT) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $165.90, Target Corporation (TGT) sits inside a range too wide to call either way: our valuation lenses put the business somewhere between $62.38 and $355.44 per share. They disagree too widely for us to state a single fair value. We publish the range rather than a midpoint because a number that precise would claim more than the methods can support. This is an educational model, not a price target or a recommendation.
The valuation discounts Target Corporation's projected free cash flows at a weighted-average cost of capital (WACC) of 9.2%, with a long-run terminal growth rate of 2.5%. About 75% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — the market is implying roughly 10.2% annual revenue growth for TGT. Our base case instead compounds to about 3.6% a year over the same forecast, so the market is pricing in materially faster growth than our base case. The reverse-DCF is a quick sanity check: it reframes 'is this stock cheap?' as 'do I believe the growth the price requires?' rather than arguing over a single point estimate of fair value.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, TGT's modeled DCF value ranges from about $71.70 to $173.42 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Target Corporation would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of TGT's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind TGT's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $104,780,000,000 | Target FY2025 10-K (accession 0000027419-26-000016, filed 2026-03-11), 52 weeks ended 2026-01-31: Net Sales $104,780M (us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, FY2025). Since 2024 Target reports ONE top line, 'Net Sales' = merchandise sales plus non-merchandise sales (Roundel advertising, credit-card profit sharing, Target Circle 360 membership, Target+ marketplace fees), so this is total revenue. -1.7% vs FY2024's $106,566M, on comparable sales of -2.6%; the third straight year of shrinking revenue from the FY2022 peak of $109,120M. UNCHANGED as the base - the DCF grows it by forecast.revenue_growth, so the recovery belongs in Year 1. CROSS-CHECK: H1 2026 (26 weeks to 2026-08-01) Net Sales $51,982M, +6.0% on H1 2025's $49,057M (8-K Ex-99.1, 2026-08-19), with comparable sales +4.7% (Q1 +5.6%, Q2 +3.8%) on traffic +4.0%. The turnaround is already in the reported numbers; the base year is the trough, not the trend. |
| Base EBIT margin | 4.9% | Target Q4/FY2025 earnings release, 8-K Ex-99.1 (accession 0000027419-26-000012, filed 2026-03-03) + FY2025 10-K: GAAP operating income $5,117M / Net Sales $104,780M = 4.88% (us-gaap:OperatingIncomeLoss, ties to the 10-K). It includes two non-recurring items that roughly half-cancel: +$593M of interchange-fee litigation settlement gains (Q1 2025) and -$250M of business transformation costs. Management's ADJUSTED margin, excluding both, was 4.6% ($4,774M) - that is the figure FY2026 guidance is built on, and it is the honest trough. History for context (same tag): 6.0% FY2019 pre-pandemic, 8.4% FY2021 peak, 3.5% FY2022 (the inventory glut), 5.3% FY2023, 5.2% FY2024, 4.9% GAAP / 4.6% adjusted FY2025. This base-year figure is not used to forecast - Year 1 starts from guidance - but it is the 'peak' the cyclical check compares against, and at 4.88% it is BELOW Year 1, so no peak-fade flag can fire off it. Operating leases: rent ($691M operating lease cost in FY2025) stays inside this EBIT, consistent with leaving operating lease liabilities out of net debt. |
| Forecast revenue growth | 5% → 4% → 4% → 3% → 3% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation. Shared by every model in this tracker. |
| Beta | 0.99 | Yahoo Finance 5Y-monthly beta via yfinance, read 2026-10-03: Published 5Y-monthly beta 0.986, used AS IS - no normalization. It is higher than a staples-heavy retailer 'should' carry (Costco 0.855), and that is earned rather than noise: Target's 5-year window holds the 2022 inventory-glut collapse, the 2023-25 run of shrinking sales, and a 52-week range of $83.44-$170.75. Nearly 60% of its merchandise sales are discretionary categories (H1 2026: apparel, beauty, home and hardlines $29.3B of $50.8B; food and household essentials the other 42%), unlike a warehouse club. Each 0.1 of beta is worth roughly $8.40/share (0.886 gives $112.11); there is no one-off event in the window that would justify normalizing it away. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability with every other company in this tracker. For Target it is neither generous nor harsh: revenue grew from $70.3B (FY2016) to $104.8B (FY2025), ~4.5% a year, but almost all of that came in the 2020-21 pandemic step-up, and FY2022-25 shrank. 3.0% adds ~$8/share; 2.0% takes ~$7 off. Must remain < WACC of 9.20%. |
| Diluted shares | 457M | Target Q2 2026 earnings release, 8-K Ex-99.1 (accession 0000027419-26-000034) + Q2 10-Q (accession 0000027419-26-000042): Q2 2026 (13 weeks to 2026-08-01) weighted-average diluted shares 456.6M; H1 456.2M; FY2025 455.6M. Shares outstanding 454.29M at 2026-08-01. The count is FLAT: Target bought back only $3M of stock in H1 2026 and none in Q2, with $8.3B of authorization unused - capital is going to stores first. Dilution from stock pay (SBC $281M in FY2025) is small. |
| Market price | $165.90 | Delayed quote · as of 2026-11-10 05:35 UTC |
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Most undervalued stocks (per our valuation) · Undervalued Consumer stocks · All valued stocks · Interactive TGT valuation & downloadable modelTickerWorth is an educational DCF tool, not a licensed investment adviser. Figures are estimates derived from public filings and market data and can be wrong.