Select one of the indicated companies to evaluate----Target

Write down the current market price for the stock.

the current market value for Target ----- 113.79

Find the earnings per share estimate for the next year and write it down.--- 137.50

nd the current Price to Earnings (P/E) ratio for the industry...not the company's ratio. Write it down.--- 18.03

1. Use the P/E valuation model (which is multiplying the industry's P/E ratio by the company's earnings per share estimate for the next year). This is the estimate of the firm's intrinsic value. Hence, you are multiplying the amount you found in step 5 by the amount you found in step 6 to find the intrinsic value per share of the company.
2. In a Word or Excel document, show your work above and answer the following questions:

• 1. Is this stock overvalued or undervalued when compared to the current stock price? If the intrinsic value you found in step 7 is greater than the current stock price you found in step 4, then the stock is undervalued and a good buy. If the intrinsic value from step 7 is less than the current stock price from step 7 then stock is overvalued and is not a good buy.
  • What are the analysts recommendations (which can be found in the Analysis tab in step 5) for this stock (buy, sell, or hold)? Do you agree with them? Would you consider purchasing this stock? Why?