Target Corporation's (NYSE:TGT) institutional shareholders had a great week as one-year returns increased after a 5.8% gain last week

editorial-team@simplywallst.com (Simply Wall St)

Sat, Nov 30, 2024, 6:00 AM 4 min read

To get a sense of who is truly in control of Target Corporation (NYSE:TGT), it is important to understand the ownership structure of the business. With 84% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Last week’s 5.8% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 1.1%.

Let's delve deeper into each type of owner of Target, beginning with the chart below.

View our latest analysis for Target

ownership-breakdown — NYSE:TGT Ownership Breakdown November 30th 2024

What Does The Institutional Ownership Tell Us About Target?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Target already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Target's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — NYSE:TGT Earnings and Revenue Growth November 30th 2024

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Target is not owned by hedge funds. The Vanguard Group, Inc. is currently the largest shareholder, with 9.8% of shares outstanding. With 7.7% and 7.3% of the shares outstanding respectively, State Street Global Advisors, Inc. and BlackRock, Inc. are the second and third largest shareholders.

A closer look at our ownership figures suggests that the top 22 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Target

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own less than 1% of Target Corporation. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own US$128m worth of shares. Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 16% stake in Target. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 2 warning signs for Target you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.