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Following are financial statement numbers and select ratios for Target Corp. for the fiscal year 2016 (ending January 28, 2017). Current Forecast Horizon Terminal Year
Following are financial statement numbers and select ratios for Target Corp. for the fiscal year 2016 (ending January 28, 2017).
Current | Forecast Horizon | Terminal Year | ||||
($ millions) | 2016 | 2017 | 2018 | 2019 | 2020 | |
Total revenues | $69,495 | $71,580 | $73,727 | $75,939 | $78,217 | $78,999 |
Net operating profit after tax (NOPAT) | 3,302 | 3,436 | 3,539 | 3,645 | 3,754 | 3,792 |
Net operating assets (NOA) | 21,128 | 21,757 | 22,409 | 23,082 | 23,774 | 24,012 |
Forecast assumptions and other financial information for Target are as follows:
Revenue growth | 3% |
Net operating profit margin (NOPM) | 4.8% |
Net operating asset turnover (NOAT) | 3.29 |
Terminal growth rate | 1% |
Discount rate | 7% |
Shares outstanding in millions | 556.2 |
Stockholders' equity | $10,953 |
Net nonoperating obligations (NNO) | $10,175 |
Use the residual operating income (ROPI) model to estimate the value of Targets equity, per share at fiscal year-end. Target Corp. shares closed at $53.82 per share on March 8, 2017, the date the 10-K was filed with the SEC. How does your valuation compare with this closing price?
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