Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Target (TGT) is a stock many investors are watching right now. TGT is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 14.45, while its industry has an average P/E of 30.33. TGT's Forward P/E has been as high as 18.70 and as low as 11.72, with a median of 15.13, all within the past year.
TGT is also sporting a PEG ratio of 2.04. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TGT's industry currently sports an average PEG of 3.38. TGT's PEG has been as high as 2.17 and as low as 1.07, with a median of 1.52, all within the past year.
Finally, investors will want to recognize that TGT has a P/CF ratio of 8.43. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. TGT's P/CF compares to its industry's average P/CF of 29.41. Over the past 52 weeks, TGT's P/CF has been as high as 11.87 and as low as 7.67, with a median of 9.75.
These are only a few of the key metrics included in Target's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, TGT looks like an impressive value stock at the moment.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
