TGT
Target Corporation
Consumer Defensive · Discount Stores · United States · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The growth sub-score was low due to contraction in revenue, net income, and diluted EPS in FY2026, which weighed heavily on the composite score of 44.8/100.
- Financial health provided meaningful support, as a debt-to-equity ratio of 0.89 and a large asset base of $59,490,000,000 contributed a relatively strong sub-score.
- Target is not assigned to any of the 24 tracked macro themes, meaning no thematic tailwind was applied, which further limited the composite score.
Why Not Higher
- Declining revenue and a 9.4% drop in net income in FY2026 produced a low growth sub-score, and thin margins of 3.5% net and 4.9% operating kept the profitability sub-score at a mid-range level.
- The absence of any macro theme assignment meant no thematic alignment score was added to the composite, and the 55.4% dividend payout ratio tempered the dividend sub-score despite consistent dividend growth.
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue declined from FY2025's $106,566,000,000 to FY2026's $104,780,000,000 (-1.7%), net income fell from $4,091,000,000 to $3,705,000,000 (-9.4%), and diluted EPS dropped from $8.86 to $8.13 (-8.2%) over the same period.
The model penalized Target for contraction across all three key growth metrics in FY2026, reflecting a business that shrank in both top-line revenue and bottom-line profitability year-over-year, resulting in a low growth sub-score.
In FY2026, Target posted a net margin of 3.5%, an operating margin of 4.9%, and a return on assets of 6.2%.
These margins are modest for a large-scale retailer, and the model's mid-range score reflects that while Target remains profitable, its thin net and operating margins limit the profitability score relative to higher-margin peers.
In FY2026, Target carried a debt-to-equity ratio of 0.89 and total assets of $59,490,000,000.
A debt-to-equity ratio below 1.0 in FY2026 suggests Target's leverage is relatively contained, and the substantial asset base supports a favorable financial health score from the model.
Over the last four quarters, revenue moved from $23,846,000,000 in 2026Q1 to $25,211,000,000 in 2026Q2, $25,270,000,000 in 2026Q3, and $30,453,000,000 in 2026Q4, while net income declined from $1,036,000,000 in 2026Q1 to $935,000,000 in 2026Q2 and $689,000,000 in 2026Q3 before recovering to $1,045,000,000 in 2026Q4; operating income followed a similar pattern, falling from $1,472,000,000 in 2026Q1 to $948,000,000 in 2026Q3 before rebounding to $1,380,000,000 in 2026Q4.
The model captured a mixed momentum picture: revenue showed a strong seasonal surge in 2026Q4, but profitability weakened materially through mid-year before partially recovering, producing a moderate rather than high momentum score.
Target's dividends per share have grown steadily from $4.14 in FY2023 to $4.38 in FY2024, $4.46 in FY2025, and $4.54 in FY2026, with a dividend payout ratio of 55.4% of net income in FY2026.
The model rewarded the consistent multi-year dividend growth trend, though the 55.4% payout ratio in FY2026 indicates a meaningful share of earnings is committed to dividends, which alongside the modest earnings base tempers the score to a mid-range level.
Target is not currently assigned to any of the 24 tracked macro themes in the model.
The absence of a macro theme assignment means the model did not apply any thematic tailwind or alignment score to this security; this reflects the current classification state and is not an indicator of the company's overall quality.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Target Corporation posted a challenging FY2026, with revenue declining 1.7% to $104,780,000,000 and net income falling 9.4% to $3,705,000,000, reflecting contraction across all key growth metrics. Profitability remains thin, with a net margin of 3.5% and operating margin of 4.9%, though the company maintains a relatively healthy balance sheet with a debt-to-equity ratio of 0.89 and total assets of $59,490,000,000. On the positive side, Target has sustained a multi-year dividend growth streak, with dividends per share rising from $4.14 in FY2023 to $4.54 in FY2026. The composite score of 44.8/100 and a Monitor Only label reflect a business that is financially stable but facing meaningful headwinds in growth and profitability.
Plain English
Target is a large, stable retailer that keeps paying and growing its dividend, but it's actually shrinking slightly — both sales and profits fell last year — and its profit margins are pretty thin, so the model gives it a middling score and says to keep an eye on it rather than act.
Bull Case vs. Bear Case
Bull Case
- Target has grown its dividend per share every year from $4.14 in FY2023 to $4.54 in FY2026, demonstrating a consistent commitment to returning cash to shareholders.
- The debt-to-equity ratio of 0.89 in FY2026 indicates leverage is relatively contained, and the $59,490,000,000 asset base provides a substantial financial foundation.
- Quarterly revenue showed a strong seasonal surge in Q4 FY2026, reaching $30,453,000,000, suggesting the business retains meaningful consumer demand during peak periods.
Bear Case
- Revenue declined 1.7% and net income fell 9.4% year-over-year in FY2026, signaling contraction across both the top and bottom lines.
- Net margin of 3.5% and operating margin of 4.9% are modest, leaving limited buffer to absorb cost pressures or further revenue softness.
- Mid-year profitability weakened materially, with net income dropping to $689,000,000 in Q3 FY2026 and operating income falling to $948,000,000 in the same quarter, before only partially recovering in Q4.
What Could Change the Picture
Bullish Triggers
- A return to revenue and earnings growth — reversing the FY2026 declines of 1.7% and 9.4% respectively — would meaningfully improve the growth sub-score and overall composite.
- Expansion of net or operating margins beyond the current 3.5% and 4.9% levels would signal improved operational efficiency and strengthen the profitability assessment.
Bearish Triggers
- A dividend payout ratio of 55.4% in FY2026 means more than half of earnings are committed to dividends; if earnings continue to decline, dividend sustainability could come into question.
- Continued mid-year profitability weakness — as seen with net income falling to $689,000,000 in Q3 FY2026 — could indicate structural margin pressure rather than a temporary seasonal dip.
Risk Profile
Low RiskTarget's risk rating is Low, supported by a debt-to-equity ratio of 0.89 and a substantial asset base of $59,490,000,000 that suggest the balance sheet is not under acute stress. However, the mid-year momentum weakness — with operating income falling to $948,000,000 in Q3 FY2026 before partially recovering — indicates that profitability can be volatile within the year.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.