Target Corp. (NYSE:TGT)

Net Operating Profit After Taxes (NOPAT)

The NOPAT values experienced a general upward trend from 2020 to 2022, increasing from $3,896 million to a peak of $7,872 million in 2022. However, a marked decrease occurred in 2023, dropping to $3,821 million. Following this decline, NOPAT demonstrated a partial recovery in 2024, increasing to $4,953 million, but then fell again to $4,376 million in 2025.

Invested Capital

Invested capital showed consistent growth throughout the entire period under review. Starting at $27,256 million in 2020, it increased steadily each year, reaching $36,107 million by 2025. This trend indicates ongoing investment in assets or operations despite fluctuations in profitability.

Return on Invested Capital (ROIC)

ROIC followed a fluctuating pattern with an overall decline towards the later years. Beginning at 14.3% in 2020, it improved significantly to a peak of 26.11% in 2022, coinciding with the highest NOPAT. However, ROIC dropped sharply to 12.64% in 2023 and showed only minor improvement thereafter, ending at 12.12% in 2025. This trend suggests diminishing efficiency in generating returns from the invested capital following the 2022 peak.

Summary Insights

The data reveals a peak performance year in 2022 characterized by the highest NOPAT and ROIC. Subsequently, the company faced a notable decline in profitability and return efficiency, despite continual growth in invested capital. This divergence may indicate challenges in leveraging increased capital to sustain or improve profitability in recent years. Attention to capital utilization and operational efficiency might be necessary to reverse the downward trend in returns.

Operating Profit Margin (OPM)

The operating profit margin exhibited an upward trend from 6.09% in early 2020 to a peak of 8.88% in early 2022, indicating improved profitability during this period. However, it sharply declined to 3.67% in early 2023 before recovering moderately to around 5.5% in the subsequent two years. This pattern suggests volatility in operating efficiency or cost management impacting profitability.

Turnover of Capital (TO)

The turnover of capital ratio generally increased from 2.87 in 2020 to a high of 3.61 by early 2023, reflecting enhanced asset utilization or sales generation from invested capital. Post-2023, the ratio saw a slight decline, settling near 2.95 in early 2025, which may indicate reduced operational efficiency or changes in asset base or sales volume.

1 – Effective Cash Tax Rate (CTR)

The 1 minus effective cash tax rate fluctuated between 74.81% and 95.55%, with no clear trend. Notably, it reached a high point of 95.55% in 2023, implying a lower effective tax burden that year. The value dropped again in subsequent periods to approximately 75%, indicating increased cash tax expense or changes in tax strategy or regulations.

Return on Invested Capital (ROIC)

The return on invested capital showed significant variability, rising from 14.3% in 2020 to a maximum of 26.11% by early 2022. This was followed by a marked decline to 12.64% in 2023 and fluctuations thereafter, ending at 12.12% in early 2025. The data indicate periods of strong capital efficiency followed by weakened returns, possibly driven by operational or market factors.

Net Operating Profit Before Taxes (NOPBT)

The net operating profit before taxes exhibited a general upward trend from February 2020 to January 2022, increasing from 4,759 million US dollars to a peak of 9,418 million US dollars. However, a significant decline was observed in January 2023, where NOPBT dropped to 3,999 million US dollars. Following this decline, slight recovery occurred in the subsequent periods, reaching 5,951 million US dollars in February 2024 and slightly decreasing to 5,849 million US dollars in February 2025.

Net Sales

Net sales showed a consistent increasing trajectory from February 2020 through January 2023, rising from 78,112 million US dollars to a peak of 109,120 million US dollars. After this peak, there was a minor reduction in sales figures in February 2024 (107,412 million US dollars) and February 2025 (106,566 million US dollars), indicating some stabilization or a slight downturn in revenue generation.

Operating Profit Margin (OPM)

The operating profit margin increased steadily from 6.09% in February 2020 to a high of 8.88% in January 2022, reflecting improved profitability relative to sales during this period. However, a sharp decrease was noted in January 2023, dropping to 3.67%, in line with the considerable decline in NOPBT despite the high sales. Moderate improvement occurred afterward, with margins climbing to around 5.5% in both February 2024 and February 2025, albeit remaining below pre-2023 levels.

Overall Analysis

While net sales grew steadily over the evaluated years, profitability as measured by NOPBT and operating profit margin demonstrated more volatility. The peak in profitability in early 2022 was followed by a pronounced decline in 2023, indicating potential operational challenges or increased costs affecting earnings despite sustained sales levels. The partial recovery in profit margins suggests some corrective measures or market adjustments were made, but profitability has not returned to earlier peaks. This trend highlights the need to examine cost structures and efficiency factors impacting profit generation going forward.

Net Sales

Net sales demonstrated a consistent upward trend from 78,112 million US dollars in 2020 to a peak of 109,120 million US dollars in 2023. However, subsequent periods saw a slight decline, with net sales reducing to 107,412 million in 2024 and further to 106,566 million in 2025. Despite the minor decreases, overall sales remain significantly higher than the initial 2020 figure, indicating underlying growth over the examined timeframe.

Invested Capital

Invested capital exhibited a steady increase through the periods, starting at 27,256 million US dollars in 2020 and rising to 36,107 million US dollars by 2025. The growth trajectory was relatively smooth, with no decreases observed, reflecting ongoing capital deployment or asset investment to support business activities.

Turnover of Capital (TO)

The turnover of capital ratio showed an improvement from 2.87 in 2020 to a peak of 3.61 in 2023, indicating increased efficiency in generating sales from invested capital during that timeframe. However, following this peak, the ratio declined to 3.13 in 2024 and further to 2.95 in 2025. This reduction suggests a diminishing efficiency in capital utilization in the most recent years despite the continued growth in invested capital.

Overall Analysis

The data reveals a phase of robust growth in net sales alongside increasing invested capital up to 2023, with a corresponding improvement in capital turnover efficiency. The post-2023 period indicates a shift, characterized by a slight decline in net sales and capital turnover ratio, even as invested capital continues to rise. This pattern may suggest emerging challenges in converting higher capital investments into proportional sales growth, warranting closer examination of capital allocation and operational efficiency.

The financial data for the analyzed periods reveal notable fluctuations in several key operational and tax-related metrics.

Cash Operating Taxes

Cash operating taxes exhibit significant variability without a consistent upward or downward trend. Starting at 862 million USD in early 2020, values peak multiple times, such as 1,585 million USD in early 2021 and again 1,474 million USD projected for early 2025. There is a sharp drop to 178 million USD in early 2023, followed by a recovery in subsequent years. This volatility suggests that taxable income or tax management strategies might be impacted by underlying operational or economic factors.

Net Operating Profit Before Taxes (NOPBT)

NOPBT shows considerable fluctuation. There is a strong increase from 4,759 million USD in 2020 to a peak of 9,418 million USD in 2022, followed by a notable decline to 3,999 million USD in 2023. Subsequent years indicate partial recovery but do not return to previous highs, with values of approximately 5,951 and 5,849 million USD in 2024 and 2025 respectively. The pattern indicates variability in operational profitability, possibly due to changes in revenue, cost structure, or market conditions.

Effective Cash Tax Rate (CTR)

The effective cash tax rate varies widely across the periods. It begins at 18.12% in 2020, increases to 23.99% in 2021, then declines to a low of 4.45% in 2023 before rising again to 25.19% by 2025. These sharp fluctuations in tax rate may reflect changes in tax legislation, utilization of tax credits, deferred tax assets, or shifts in the company’s earnings mix that impact taxable income.

Overall, the data indicates a volatile financial and tax environment impacting profitability and tax expense. The irregular patterns in both operating profit and cash taxes, as well as the effective tax rate, suggest the company may be experiencing varying operational challenges, economic conditions, or strategic tax planning approaches over the analyzed periods.