Is Target Attractively Priced After 33% Fall and Supply Chain Concerns in 2025?

Wondering whether Target is attractively priced right now? You are not alone, and digging into valuation could help you spot an opportunity before the market catches on. The company has moved 3.3% higher over the past month, but shares are still down more than 33% year-to-date, signaling shifting investor sentiment and possible changes in risk perception. Recent headlines have spotlighted supply chain challenges and evolving consumer spending habits, both of which have played a role in Target’s recent price swings. Industry analysts are also watching closely as competitive pressures in the retail sector drive new strategies and partnerships. Right now, Target scores a 5 out of 6 on our valuation checklist for undervalued companies. In the next sections, we will break down what this score means using the most common valuation approaches. Plus, we will reveal an even better way to get a real read on value at the end of the article.

Find out why Target's -35.2% return over the last year is lagging behind its peers.

Approach 1: Target Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a widely used valuation approach that estimates a company's intrinsic value by forecasting its future cash flows and discounting them back to their present value. In Target’s case, this analysis is based on the 2 Stage Free Cash Flow to Equity model, using cash flow projections from analysts and extrapolating further growth.

Target’s most recent Free Cash Flow (FCF) was $2.26 Billion. Analyst estimates extend five years into the future, expecting FCF to grow steadily and reach $3.49 Billion by 2030. Cash flows beyond analysts’ projections, covering the next decade, have been extrapolated by Simply Wall St to assess longer-term value potential.

According to this model, Target’s fair value comes out to $161.81 per share. With the stock currently trading at a 43.2% discount to this estimate, the DCF suggests Target is significantly undervalued compared to its intrinsic value. This discount may provide an attractive opportunity for value-focused investors.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Target is undervalued by 43.2%. Track this in your watchlist or portfolio, or discover 843 more undervalued stocks based on cash flows.TGT Discounted Cash Flow as at Nov 2025

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Target.

Approach 2: Target Price vs Earnings (PE)

The Price-to-Earnings (PE) ratio is a widely used valuation tool for assessing profitable companies like Target. By showing how much investors are willing to pay for each dollar of a company's earnings, the PE ratio helps gauge whether a stock is attractively priced relative to its profitability.

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What counts as a "normal" or "fair" PE ratio depends on several factors, especially expected earnings growth and perceived risk. Companies with higher growth prospects often justify a higher PE, while heightened risks or industry pressures may suppress it.

Target currently trades at a PE ratio of 10.6x, which is notably lower than the Consumer Retailing industry average of 19.7x and below its peer average of 27.4x. This substantial discount may catch the eye of value-focused investors, but it is important to understand whether it is warranted.

Simply Wall St’s “Fair Ratio” offers a deeper perspective by estimating what Target’s PE should be, given the company’s growth outlook, profit margins, industry environment, market cap, and risk profile. For Target, this Fair Ratio comes in at 17.8x. Unlike basic peer or industry comparisons, the Fair Ratio is tailored and offers a more robust benchmark for judging value.

With Target’s current PE well below its Fair Ratio, the evidence suggests the stock is undervalued at its current earnings multiple.

Result: UNDERVALUEDNYSE:TGT PE Ratio as at Nov 2025

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1406 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Target Narrative

Earlier, we mentioned there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is your investment story, a way to connect your perspective on a company to real numbers by stating what you believe about its future revenue, profit margins, and fair value. Narratives bring the "why" behind the numbers into focus, linking your view of Target's strategy, risks, and potential with a financial forecast and target price.

Narratives are simple to create and available on Simply Wall St’s Community page, a space where millions of investors share and compare their outlooks. With Narratives, you can see whether your fair value is higher or lower than Target’s current price and make buy or sell decisions confidently. As new news or earnings releases arrive, Narratives update dynamically so your views always reflect the latest information.

For example, one investor might see Target’s investments in digital, private label brands, and supply chain agility driving sustained margin growth and set a high fair value. Another, more cautious investor may focus on competitive and regulatory pressures, forecasting lower margins and a discounted target price.

Do you think there's more to the story for Target? Head over to our Community to see what others are saying!NYSE:TGT Community Fair Values as at Nov 2025

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include TGT.

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