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Should Value Investors Buy Target (TGT) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is Target (TGT - Free Report) . TGT is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 14.63. This compares to its industry's average Forward P/E of 29.10. Over the last 12 months, TGT's Forward P/E has been as high as 18.70 and as low as 12.34, with a median of 15.31.

TGT is also sporting a PEG ratio of 1.80. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TGT's industry currently sports an average PEG of 3.24. Over the past 52 weeks, TGT's PEG has been as high as 1.94 and as low as 0.97, with a median of 1.32.

Finally, our model also underscores that TGT has a P/CF ratio of 9.46. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 28.71. TGT's P/CF has been as high as 11.87 and as low as 7.72, with a median of 9.84, all within the past year.

These are only a few of the key metrics included in Target's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, TGT looks like an impressive value stock at the moment.


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