Target (TGT) generated free cash flow over the last twelve months equal to 6.4% of its market value, above the 4.4% median for S&P 500 companies. Its operating margin was just 5.6% versus 18.5% for the S&P 500, yet operations produced $8.7 billion of cash, with about half spent on capital expenditure, leaving $4.5 billion of free cash flow. Sales of apparel and accessories fell 4.7% and home furnishings fell 6.5% in the latest fiscal year, but fiscal Q2 2026 revenue rose 5.3% and management raised its full-year sales growth forecast to around 5% from 4%. Tariff refunds added 3.7 points to the 9.6% operating margin in that quarter. Target has deployed about $2.4 billion of capital spending in fiscal 2026 so far and expects about $5 billion for the year, while carrying $13.3 billion in net debt, equal to 19% of its market value.
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