When Should You Buy Target Corporation (NYSE:TGT)?
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Let's talk about the popular Target Corporation (NYSE:TGT). The company's shares received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$121 at one point, and dropping to the lows of US$88.76. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Target's current trading price of US$97.35 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Target’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What Is Target Worth?
Good news, investors! Target is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is $161.71, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, Target’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
See our latest analysis for Target
What kind of growth will Target generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a negative profit growth of -6.3% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Target. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? Although TGT is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. We recommend you think about whether you want to increase your portfolio exposure to TGT, or whether diversifying into another stock may be a better move for your total risk and return.
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Are you a potential investor? If you’ve been keeping an eye on TGT for a while, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.