24 Aug 2022


Stock Valuation and Analysis

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Academic level: Master’s

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What are some of the significant news items and press releases made by the company over the last year? 

The last year has been the year of change for us. It is the same year that the company recorded a quick move with its plans of remodeling the stores with stocks that cover the needs of the current and the next generation. All the plans are intended to make the work more comfortable for the shoppers as well as to attract more and more clients to the stores. The work of remodeling and improvement of the services is expected to move at a rapid speed, especially in 2018, which is a year for the growth of the company (Target Brands, Inc., 2018a). This year alone is covered by various remodels that are estimated to be triple of what the company is used to. The company also has some good news for the stores that are located in Minneapolis and St. Paul guest. 

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The good news is that the company plans to invest a total amount of 250 million dollars in the two cities, particularly in the respective stores. The money is targeted on the remodeling of not less than 28 city stores, which is only half of what is expected to be improved. This is just the begging of a new journey for the company in remodeling all the stores in the next few years. In fact, the company's dream is to see more than 1000 stores opened by the year 2020 as time goes by (Target Brands, Inc., 2018b). All these efforts are done with the customers in mind and in the aim of fulfilling our vision as a company which is to serve the customers' needs with satisfactory feeling. As an added advantage the change is expected to please the guests as they will shop in an environment that is conducive for them which they will love. It is also targeted to make shopping easier and convenient. 

In the same year, which is 2018, the company is expected to finish its remodeling process of about 325 new stores. However, the Twin Cities will not remain to be the biggest remodel market of the year since we have plans of expanding the market to other big cities. Some of these big cities that we plan to invest in include Los Angeles, New York City, and Chicago. The good news to all our loyal clients and guests is that the remodeling process is not ending soon. This is because of the plans we have of expanding and remodeling more of our stores in the coming few years. They should expect the process to be quick and efficient on which the daily routine of the business will not be interrupted. This means that the guests to our stores should expect more than they love, which is already our target (Target Brands, Inc., 2018b). They should expect a one-stop shop for everything they desire. This should be expected since our hardworking employees have been on the lookout for every customer's needs and their future desires of what they expect in such a store. They should also be sure that each of the remodels is done in their unique way with an assurance that no remodel will look the same as the other. This is just a taste of the good news that the company has in store for our guests and future clients. 

Describe the relationship between the value of the stock and the price earnings ratio. 

The worth of the stock is equally based on current or future profits. In other words, that is the price-to-earnings ratio, which is also called the P/E ratio. This should be equally illustrated, no matter the amount invested by the investors on that company. Therefore it is right to say that the stock that is valued in a fair manner should have a P/E value that is equivalent to its price and not vice versa. However, it has been proven that most of the companies will have a stock that is either undervalued or overvalued basing the facts on the earnings (Simply Wall St, 2017). To investors, this is a golden opportunity for them to buy shares at a bargain or on the other hand, to sell their holdings at a premium price or value. It is essential for the company owners to note that uncertainty in economic and market portrays a negative effect on the relationship between the P/E ratio of a company and its stock price. If for instance, a company does not record a positive profit performance among the financial analyst community, then it is more likely to chase away the investors as well as their expectations on the company (Simply Wall St, 2017). This can also cause the P/E ratio in the company to decline in a drastic manner. 

What information does the Market Capitalization (Market Cap) and Beta provide to the investor? 

Both Market Cap and beta are relatively helpful to the investors. One hand, the Market cap is known for describing the total value of the stock share of the company. It also represents the relative size of the company as well as the worth market price of the company. All this is useful information to the investors who might want or be willing to invest in a company. They want to be sure of their investments. 

On the other hand, the Beta provides indicative information, especially about the price risk to get a clear understanding of the stock's risk profile. This information helps the investors in making their decisions about the investments they want to make in the company (Chen, 2018). Currently, the market cap is 36.545B, which implies that Target is a mid-cap company. In other words, the beta is used to measure the value of an investment when compared to the stock market mainly as a whole. For instance, if the Beta is defined as high volatility, then it means that it is risky, but on the other hand, it can pose greater rewards. But if it's negative, then it moves in the opposite direction away from the rest of the stock market. 


Chen, J. (2018). Market Capitalization . Retrieved on 19 May 2019, from https://www.investopedia.com/terms/m/marketcapitalization.asp 

Simply Wall St. (2017). Is Target Corporation's (TGT) PE Ratio A Signal To Buy For Investors? Retrieved on 19 May 2019, from https://simplywall.st/news/is-target-corporations-tgt-pe-ratio-a-signal-to-buy-for-investors/ 

Target Brands, Inc. (2018b). Target's gearing up for another big year of store remodels, including a major investment in the twin cities. A Bullseye View . Retrieved on 19 May 2019, from https://corporate.target.com/article/2018/03/store-remodels 

Target Brands, Inc. (2018a). Target Reports First Quarter 2018 Earnings and Affirms Full-Year Guidance. A Bullseye View . Retrieved on 19 May 2019, from https://corporate.target.com/press/releases/2018/05/target-reports-first-quarter-2018-earnings-and-aff 


Retrieved from Yahoo Finance https://finance.yahoo.com/quote/TGT?p=TGT 

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StudyBounty. (2023, September 16). Stock Valuation and Analysis.


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