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Posted on Sep 06, 2024

Question 1. You are provided with quarterly financial for Target corporation. Answer the following questions: 1) What is Target's P/E in Q4 of 2014? (Note:

Question 1. You are provided with quarterly financial for Target corporation. Answer the following questions: 1) What is Target's P/E in Q4 of 2014? (Note: epsf12 is the EPS of the previous 12 months relative to the fiscal quarter end. We refer to it as a trailing twelve months (TTM) EPS.) I 2) Compute P/E for each quarter. In which quarter Target had the lowest P/E ratio? 3) Take the quarter in which Target had the lowest P/E. What is the 1-year forward return for this quarter? b. What is the 2-year forward return for this quarter? a. 4) For each quarter in the dataset, compute 1-year forward return. Compute correlation between P/E and the 1-year forward return. 5) For each quarter in the dataset, compute 2-year forward return. Compute correlation between P/E and the 2-year forward return. 6) Comment on the correlations computed in 5) and 6). What important lesson these correlations demonstrate? F1 fx curcda D 1 2 3 curcda USD USD 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 A B GVKEY datadate fyear fqtr 3813 20100131 2009 3813 20100430 2010 3813 20100731 2010 3813 20101031 2010 3813 20110131 2010 3813 20110430 2011 3813 20110731 2011 3813 20111031 2011 3813 20120131 2011 3813 20120430 2012 3813 20120731 2012 3813 20121031 2012 3813 20130131 2012 3813 20130430 2013 3813 20130731 2013 3813 20131031 2013 3813 20140131 2013 3813 20140430 2014 3813 20140731 2014 3813 20141031 2014 3813 20150131 2014 3813 20150430 2015 3813 20150731 2015 3813 20151031 2015 3813 20160131 2015 3813 20160430 2016 3813 20160731 2016 3813 20161031 2016 3813 20170131 2016 3813 20170430 2017 3813 20170731 2017 3813 20171031 2017 3813 20180131 2017 3813 20180430 2018 3813 20180731 2018 3813 20181031 2018 3813 20190131 2018 3813 20190430 2019 3813 20190731 2019 3813 20191031 2019 E conm 4 TARGET CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP 4 TARGET CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP 4 TARGLT CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP 4 TARGET CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP 4 TARGET CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP 4 TARGET CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP 4 TARGET CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP 4 TARGET CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP 4 TARGET CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP 4 TARGET CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD G datafqtr 200904 201001 201002 201003 201004 201101 201102 201103 201104 2012Q1 201202 201203 201204 201301 2013Q2 201303 201304 201401 201402 201403 201404 201501 2015Q2 201503 201504 201601 2016Q2 2016Q3 201604 201701 2017Q2 201703 201704 2018Q1 2018Q2 201803 201804 201901 2019Q2 2019Q3 H epsf12 prcca 3.3 51.27 3.51 56.87 3.64 51.32 3.81 51.94 4 54.83 41 49.1 4.21 51.49 4.29 54.75 4.28 50.81 4.34 57.94 4.37 60.65 4.51 63.75 4.52 60.41 4.48 70.56 4.58 71.25 4.45 64.79 4.2 56.64 4.09 61.75 3.55 59.59 3.56 61.82 3.83 73.61 3.94 78.83 4.53 81.85 4.47 77.18 5.25 72.42 5.3 79.5 5.15 75.33 5.45 68.73 4.58 64.48 4.8 55.85 4.95 56.67 4.76 59.04 5.29 75.22 5.4 72.6 5.67 80.68 5.97 83.63 5.5 73 5.7 77.42 6.02 86.4 6.23 106.91 USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD Question 1. You are provided with quarterly financial for Target corporation. Answer the following questions: 1) What is Target's P/E in Q4 of 2014? (Note: epsf12 is the EPS of the previous 12 months relative to the fiscal quarter end. We refer to it as a trailing twelve months (TTM) EPS.) I 2) Compute P/E for each quarter. In which quarter Target had the lowest P/E ratio? 3) Take the quarter in which Target had the lowest P/E. What is the 1-year forward return for this quarter? b. What is the 2-year forward return for this quarter? a. 4) For each quarter in the dataset, compute 1-year forward return. Compute correlation between P/E and the 1-year forward return. 5) For each quarter in the dataset, compute 2-year forward return. Compute correlation between P/E and the 2-year forward return. 6) Comment on the correlations computed in 5) and 6). What important lesson these correlations demonstrate? F1 fx curcda D 1 2 3 curcda USD USD 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 A B GVKEY datadate fyear fqtr 3813 20100131 2009 3813 20100430 2010 3813 20100731 2010 3813 20101031 2010 3813 20110131 2010 3813 20110430 2011 3813 20110731 2011 3813 20111031 2011 3813 20120131 2011 3813 20120430 2012 3813 20120731 2012 3813 20121031 2012 3813 20130131 2012 3813 20130430 2013 3813 20130731 2013 3813 20131031 2013 3813 20140131 2013 3813 20140430 2014 3813 20140731 2014 3813 20141031 2014 3813 20150131 2014 3813 20150430 2015 3813 20150731 2015 3813 20151031 2015 3813 20160131 2015 3813 20160430 2016 3813 20160731 2016 3813 20161031 2016 3813 20170131 2016 3813 20170430 2017 3813 20170731 2017 3813 20171031 2017 3813 20180131 2017 3813 20180430 2018 3813 20180731 2018 3813 20181031 2018 3813 20190131 2018 3813 20190430 2019 3813 20190731 2019 3813 20191031 2019 E conm 4 TARGET CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP 4 TARGET CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP 4 TARGLT CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP 4 TARGET CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP 4 TARGET CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP 4 TARGET CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP 4 TARGET CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP 4 TARGET CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP 4 TARGET CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP 4 TARGET CORP 1 TARGET CORP 2 TARGET CORP 3 TARGET CORP USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD G datafqtr 200904 201001 201002 201003 201004 201101 201102 201103 201104 2012Q1 201202 201203 201204 201301 2013Q2 201303 201304 201401 201402 201403 201404 201501 2015Q2 201503 201504 201601 2016Q2 2016Q3 201604 201701 2017Q2 201703 201704 2018Q1 2018Q2 201803 201804 201901 2019Q2 2019Q3 H epsf12 prcca 3.3 51.27 3.51 56.87 3.64 51.32 3.81 51.94 4 54.83 41 49.1 4.21 51.49 4.29 54.75 4.28 50.81 4.34 57.94 4.37 60.65 4.51 63.75 4.52 60.41 4.48 70.56 4.58 71.25 4.45 64.79 4.2 56.64 4.09 61.75 3.55 59.59 3.56 61.82 3.83 73.61 3.94 78.83 4.53 81.85 4.47 77.18 5.25 72.42 5.3 79.5 5.15 75.33 5.45 68.73 4.58 64.48 4.8 55.85 4.95 56.67 4.76 59.04 5.29 75.22 5.4 72.6 5.67 80.68 5.97 83.63 5.5 73 5.7 77.42 6.02 86.4 6.23 106.91 USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD