Question
Can someone help with the following: Following are financial statement numbers and select ratios for Target Corp. for the fiscal year 2013 (ending February 1,
Can someone help with the following:
Following are financial statement numbers and select ratios for Target Corp. for the fiscal year 2013 (ending February 1, 2014).
| Current | Forecast Horizon | Terminal Year | ||||
($ millions) | 2013 | 2014 | 2015 | 2016 | 2017 | ||
Total revenues | 72,596 | 75,645 | 78,822 | 82,133 | 85,582 | 88,150 | |
Net operating profit after tax (NOPAT) | 2,680 | 2,799 | 2,916 | 3,039 | 3,167 | 3,262 | |
Net operating assets (NOA) | 29,318 | 30,502 | 31,783 | 33,118 | 34,509 | 35,544 | |
Forecast assumptions and other financial information for Target are as follows:
Revenue growth | 4.2% |
Net operating profit margin (NOPM) | 3.7% |
Net operating asset turnover (NOAT) | 2.48 |
Terminal growth rate | 3% |
Discount rate | 6% |
Shares outstanding in millions | 633.2 |
Stockholders' equity | $16,231 |
Net nonoperating obligations (NNO) | $13,087 |
a. Use the residual operating income (ROPI) model to estimate the value of Targets equity, per share at fiscal year-end.
b. Target Corp. shares closed at $56.64 per share on February 1, 2014. How does your valuation compare with this closing price?
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