Stock Analysis on Net
Stock Analysis on Net

Target Corp. (NYSE:TGT)

Analysis of Income Taxes

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Income Tax Expense (Benefit)

Target Corp., income tax expense (benefit), continuing operations

US$ in millions

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12 months ended: Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017 Jan 30, 2016
Federal 1,013  536  257  746  1,108  1,652 
State 281  169  116  105  141  265 
International 68  38  51  59 
Current 1,362  743  424  910  1,255  1,924 
Federal (118) 150  263  (234) 21  (272)
State (64) 29  57  28  21  (50)
International (2) (1) 14  (1) — 
Deferred (184) 178  322  (192) 41  (322)
Provision for income taxes 1,178  921  746  718  1,296  1,602 

Based on: 10-K (filing date: 2021-03-10), 10-K (filing date: 2020-03-11), 10-K (filing date: 2019-03-13), 10-K (filing date: 2018-03-14), 10-K (filing date: 2017-03-08), 10-K (filing date: 2016-03-11).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Target Corp.’s current increased from 2019 to 2020 and from 2020 to 2021.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Target Corp.’s deferred decreased from 2019 to 2020 and from 2020 to 2021.
Provision for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Target Corp.’s provision for income taxes increased from 2019 to 2020 and from 2020 to 2021.

Effective Income Tax Rate (EITR)

Target Corp., effective income tax rate (EITR) reconciliation

Microsoft Excel LibreOffice Calc
Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017 Jan 30, 2016
Federal statutory tax rate 21.00% 21.00% 21.00% 33.70% 35.00% 35.00%
State income taxes, net of the federal tax benefit 3.30% 3.70% 3.60% 2.20% 2.70% 3.00%
International -1.20% -1.40% -1.30% -4.60% -2.60% -2.30%
Excess tax benefit related to share-based payments -1.00% -0.40% -0.30% -0.10% -0.60% 0.00%
Federal tax credits -0.60% -0.80% -1.10% -0.80% -0.70% 0.00%
Change in valuation allowance 0.00% 0.00% 0.00% 0.00% 0.00% -2.30%
Other -0.30% -0.10% -0.60% -1.10% -1.10% -0.90%
Effective tax rate, before Tax Cuts and Jobs Act 21.20% 22.00% 21.30% 29.30% 32.70% 32.50%
Tax Cuts and Jobs Act 0.00% 0.00% -1.00% -9.60% 0.00% 0.00%
Effective tax rate 21.20% 22.00% 20.30% 19.70% 32.70% 32.50%

Based on: 10-K (filing date: 2021-03-10), 10-K (filing date: 2020-03-11), 10-K (filing date: 2019-03-13), 10-K (filing date: 2018-03-14), 10-K (filing date: 2017-03-08), 10-K (filing date: 2016-03-11).

Item Description The company
Effective tax rate, before Tax Cuts and Jobs Act Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Target Corp.’s effective tax rate, before Tax Cuts and Jobs Act increased from 2019 to 2020 but then decreased significantly from 2020 to 2021.

Components of Deferred Tax Assets and Liabilities

Target Corp., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel LibreOffice Calc
Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017 Jan 30, 2016
Accrued and deferred compensation 623  264  248  262  455  476 
Accruals and reserves not currently deductible 192  169  181  256  328  323 
Self-insured benefits 138  124  114  109  178  199 
Deferred occupancy income 141  148  157  164  258  270 
Leased assets 1,108  1,000  823  —  —  — 
Other 55  58  40  42  62  90 
Gross deferred tax assets 2,257  1,763  1,563  833  1,281  1,358 
Property and equipment (2,003) (1,767) (1,557) (1,292) (1,822) (1,790)
Leased assets (996) (880) (731) —  —  — 
Inventory (146) (156) (140) (130) (182) (190)
Other (82) (74) (95) (91) (102) (168)
Gross deferred tax liabilities (3,227) (2,877) (2,523) (1,513) (2,106) (2,148)
Net deferred tax asset (liability) (970) (1,114) (960) (680) (825) (790)

Based on: 10-K (filing date: 2021-03-10), 10-K (filing date: 2020-03-11), 10-K (filing date: 2019-03-13), 10-K (filing date: 2018-03-14), 10-K (filing date: 2017-03-08), 10-K (filing date: 2016-03-11).

Item Description The company
Gross deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Target Corp.’s gross deferred tax assets increased from 2019 to 2020 and from 2020 to 2021.
Net deferred tax asset (liability) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Target Corp.’s net deferred tax asset (liability) decreased from 2019 to 2020 but then increased from 2020 to 2021 not reaching 2019 level.

Deferred Tax Assets and Liabilities, Classification

Target Corp., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel LibreOffice Calc
Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017 Jan 30, 2016
Deferred tax assets 20  12  33  36  33 
Deferred tax liabilities 990  1,122  972  713  861  823 

Based on: 10-K (filing date: 2021-03-10), 10-K (filing date: 2020-03-11), 10-K (filing date: 2019-03-13), 10-K (filing date: 2018-03-14), 10-K (filing date: 2017-03-08), 10-K (filing date: 2016-03-11).

Item Description The company
Deferred tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Target Corp.’s deferred tax assets decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Target Corp.’s deferred tax liabilities increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.

Adjustments to Financial Statements: Removal of Deferred Taxes

Target Corp., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017 Jan 30, 2016
Adjustment to Total Assets
Total assets (as reported) 51,248  42,779  41,290  38,999  37,431  40,262 
Less: Noncurrent deferred tax assets, net 20  12  33  36  33 
Total assets (adjusted) 51,228  42,771  41,278  38,966  37,395  40,229 
Adjustment to Total Liabilities
Total liabilities (as reported) 36,808  30,946  29,993  27,290  26,478  27,305 
Less: Noncurrent deferred tax liabilities, net 990  1,122  972  713  861  823 
Total liabilities (adjusted) 35,818  29,824  29,021  26,577  25,617  26,482 
Adjustment to Shareholders’ Investment
Shareholders’ investment (as reported) 14,440  11,833  11,297  11,709  10,953  12,957 
Less: Net deferred tax assets (liabilities) (970) (1,114) (960) (680) (825) (790)
Shareholders’ investment (adjusted) 15,410  12,947  12,257  12,389  11,778  13,747 
Adjustment to Net Earnings
Net earnings (as reported) 4,368  3,281  2,937  2,934  2,737  3,363 
Add: Deferred income tax expense (benefit) (184) 178  322  (192) 41  (322)
Net earnings (adjusted) 4,184  3,459  3,259  2,742  2,778  3,041 

Based on: 10-K (filing date: 2021-03-10), 10-K (filing date: 2020-03-11), 10-K (filing date: 2019-03-13), 10-K (filing date: 2018-03-14), 10-K (filing date: 2017-03-08), 10-K (filing date: 2016-03-11).


Target Corp., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Target Corp., adjusted financial ratios

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Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017 Jan 30, 2016
Net Profit Margin
Reported net profit margin 4.73% 4.25% 3.95% 4.08% 3.94% 4.56%
Adjusted net profit margin 4.53% 4.48% 4.38% 3.81% 4.00% 4.12%
Total Asset Turnover
Reported total asset turnover 1.80 1.80 1.80 1.84 1.86 1.83
Adjusted total asset turnover 1.80 1.80 1.80 1.84 1.86 1.83
Financial Leverage
Reported financial leverage 3.55 3.62 3.65 3.33 3.42 3.11
Adjusted financial leverage 3.32 3.30 3.37 3.15 3.17 2.93
Return on Equity (ROE)
Reported ROE 30.25% 27.73% 26.00% 25.06% 24.99% 25.96%
Adjusted ROE 27.15% 26.72% 26.59% 22.13% 23.59% 22.12%
Return on Assets (ROA)
Reported ROA 8.52% 7.67% 7.11% 7.52% 7.31% 8.35%
Adjusted ROA 8.17% 8.09% 7.90% 7.04% 7.43% 7.56%

Based on: 10-K (filing date: 2021-03-10), 10-K (filing date: 2020-03-11), 10-K (filing date: 2019-03-13), 10-K (filing date: 2018-03-14), 10-K (filing date: 2017-03-08), 10-K (filing date: 2016-03-11).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Target Corp.’s adjusted net profit margin ratio improved from 2019 to 2020 and from 2020 to 2021.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Target Corp.’s adjusted total asset turnover ratio improved from 2019 to 2020 and from 2020 to 2021.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Target Corp.’s adjusted financial leverage ratio decreased from 2019 to 2020 but then slightly increased from 2020 to 2021.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Target Corp.’s adjusted ROE improved from 2019 to 2020 and from 2020 to 2021.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Target Corp.’s adjusted ROA improved from 2019 to 2020 and from 2020 to 2021.

Target Corp., Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017 Jan 30, 2016
As Reported
Selected Financial Data (US$ in millions)
Net earnings 4,368  3,281  2,937  2,934  2,737  3,363 
Sales 92,400  77,130  74,433  71,879  69,495  73,785 
Profitability Ratio
Net profit margin1 4.73% 4.25% 3.95% 4.08% 3.94% 4.56%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings 4,184  3,459  3,259  2,742  2,778  3,041 
Sales 92,400  77,130  74,433  71,879  69,495  73,785 
Profitability Ratio
Adjusted net profit margin2 4.53% 4.48% 4.38% 3.81% 4.00% 4.12%

Based on: 10-K (filing date: 2021-03-10), 10-K (filing date: 2020-03-11), 10-K (filing date: 2019-03-13), 10-K (filing date: 2018-03-14), 10-K (filing date: 2017-03-08), 10-K (filing date: 2016-03-11).

2021 Calculations

1 Net profit margin = 100 × Net earnings ÷ Sales
= 100 × 4,368 ÷ 92,400 = 4.73%

2 Adjusted net profit margin = 100 × Adjusted net earnings ÷ Sales
= 100 × 4,184 ÷ 92,400 = 4.53%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Target Corp.’s adjusted net profit margin ratio improved from 2019 to 2020 and from 2020 to 2021.

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017 Jan 30, 2016
As Reported
Selected Financial Data (US$ in millions)
Sales 92,400  77,130  74,433  71,879  69,495  73,785 
Total assets 51,248  42,779  41,290  38,999  37,431  40,262 
Activity Ratio
Total asset turnover1 1.80 1.80 1.80 1.84 1.86 1.83
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Sales 92,400  77,130  74,433  71,879  69,495  73,785 
Adjusted total assets 51,228  42,771  41,278  38,966  37,395  40,229 
Activity Ratio
Adjusted total asset turnover2 1.80 1.80 1.80 1.84 1.86 1.83

Based on: 10-K (filing date: 2021-03-10), 10-K (filing date: 2020-03-11), 10-K (filing date: 2019-03-13), 10-K (filing date: 2018-03-14), 10-K (filing date: 2017-03-08), 10-K (filing date: 2016-03-11).

2021 Calculations

1 Total asset turnover = Sales ÷ Total assets
= 92,400 ÷ 51,248 = 1.80

2 Adjusted total asset turnover = Sales ÷ Adjusted total assets
= 92,400 ÷ 51,228 = 1.80

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Target Corp.’s adjusted total asset turnover ratio improved from 2019 to 2020 and from 2020 to 2021.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017 Jan 30, 2016
As Reported
Selected Financial Data (US$ in millions)
Total assets 51,248  42,779  41,290  38,999  37,431  40,262 
Shareholders’ investment 14,440  11,833  11,297  11,709  10,953  12,957 
Solvency Ratio
Financial leverage1 3.55 3.62 3.65 3.33 3.42 3.11
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 51,228  42,771  41,278  38,966  37,395  40,229 
Adjusted shareholders’ investment 15,410  12,947  12,257  12,389  11,778  13,747 
Solvency Ratio
Adjusted financial leverage2 3.32 3.30 3.37 3.15 3.17 2.93

Based on: 10-K (filing date: 2021-03-10), 10-K (filing date: 2020-03-11), 10-K (filing date: 2019-03-13), 10-K (filing date: 2018-03-14), 10-K (filing date: 2017-03-08), 10-K (filing date: 2016-03-11).

2021 Calculations

1 Financial leverage = Total assets ÷ Shareholders’ investment
= 51,248 ÷ 14,440 = 3.55

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ investment
= 51,228 ÷ 15,410 = 3.32

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Target Corp.’s adjusted financial leverage ratio decreased from 2019 to 2020 but then slightly increased from 2020 to 2021.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017 Jan 30, 2016
As Reported
Selected Financial Data (US$ in millions)
Net earnings 4,368  3,281  2,937  2,934  2,737  3,363 
Shareholders’ investment 14,440  11,833  11,297  11,709  10,953  12,957 
Profitability Ratio
ROE1 30.25% 27.73% 26.00% 25.06% 24.99% 25.96%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings 4,184  3,459  3,259  2,742  2,778  3,041 
Adjusted shareholders’ investment 15,410  12,947  12,257  12,389  11,778  13,747 
Profitability Ratio
Adjusted ROE2 27.15% 26.72% 26.59% 22.13% 23.59% 22.12%

Based on: 10-K (filing date: 2021-03-10), 10-K (filing date: 2020-03-11), 10-K (filing date: 2019-03-13), 10-K (filing date: 2018-03-14), 10-K (filing date: 2017-03-08), 10-K (filing date: 2016-03-11).

2021 Calculations

1 ROE = 100 × Net earnings ÷ Shareholders’ investment
= 100 × 4,368 ÷ 14,440 = 30.25%

2 Adjusted ROE = 100 × Adjusted net earnings ÷ Adjusted shareholders’ investment
= 100 × 4,184 ÷ 15,410 = 27.15%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Target Corp.’s adjusted ROE improved from 2019 to 2020 and from 2020 to 2021.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017 Jan 30, 2016
As Reported
Selected Financial Data (US$ in millions)
Net earnings 4,368  3,281  2,937  2,934  2,737  3,363 
Total assets 51,248  42,779  41,290  38,999  37,431  40,262 
Profitability Ratio
ROA1 8.52% 7.67% 7.11% 7.52% 7.31% 8.35%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net earnings 4,184  3,459  3,259  2,742  2,778  3,041 
Adjusted total assets 51,228  42,771  41,278  38,966  37,395  40,229 
Profitability Ratio
Adjusted ROA2 8.17% 8.09% 7.90% 7.04% 7.43% 7.56%

Based on: 10-K (filing date: 2021-03-10), 10-K (filing date: 2020-03-11), 10-K (filing date: 2019-03-13), 10-K (filing date: 2018-03-14), 10-K (filing date: 2017-03-08), 10-K (filing date: 2016-03-11).

2021 Calculations

1 ROA = 100 × Net earnings ÷ Total assets
= 100 × 4,368 ÷ 51,248 = 8.52%

2 Adjusted ROA = 100 × Adjusted net earnings ÷ Adjusted total assets
= 100 × 4,184 ÷ 51,228 = 8.17%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Target Corp.’s adjusted ROA improved from 2019 to 2020 and from 2020 to 2021.