Target stock was trading on Wednesday Morning at $149.54 as of 09:39 AM EDT
Stocks can decline by 100% when bought. You can make more than 100% if you choose a thriving company. Target stock (NYSE:TGT) has risen by 153% in five years. Many would be pleased by such a feat. Last week alone, it fell by 7.2%.
Short-term, the market is like a voting machine, but in the long term, it’s a weighing machine. Looking at a company’s share price and earnings per share might show how market sentiment has changed (EPS).
Target’s EPS grew by 13% annually throughout the five years of the share price rise. This EPS growth is slower than the 20% annual share price rise. The market probably likes the company more now than it did five years ago. Given five years of earnings growth, that’s hardly surprising. We want to determine if the company’s strong five-year return is due to fundamentals after the stock dropped 7.2% last week.
Total shareholder return (TSR) and share price return are essential investment return measures. The TSR accounts for cash dividends (if reinvested) and discounted capital raisings and spin-offs. For dividend-paying corporations, the TSR is generally higher than the share price return. Target’s 5-year TSR is 187%. That beats Target stock’s return. Mostly due to dividends!
Target Stock Outlook
Target shareholders are down 35% year-to-date (even including dividends). That’s worse than the 21% market drop. In a sinking market, oversold stocks are inevitable. Focusing on the fundamentals, long-term shareholders made 23% each year over half a decade. The recent sell-off could be one such opportunity. Therefore, review fundamental data for indicators of long-term growth. Long-term stock performance is usually intriguing. Take time to deduce if Target stock is still a good stock to buy.
Featured Image- Megapixl @ Andreistanescu