Valuation Using Income Statement Multiples ????????????????????

The following table provides summary data for Target Corp. and its competitors, Kohl’s Corp. and Walmart Stores, Inc.

(in millions) Target Kohl’s Walmart Company assumed value. . . . . . . . . . . . . . . . . . . . . . . . . . . — $13,255 $251,159 Equity assumed value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — $ 9,254 $209,830 NOPAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,788 $ 902 $ 16,421 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,363 $ 673 $ 14,694 Net nonoperating obligations (assets) . . . . . . . . . . . . . . . . . $8,714 $ 4,001 $ 41,329 Common shares outstanding. . . . . . . . . . . . . . . . . . . . . . . . 640.2 shares 186.0 shares 3,162.0 shares Required

a. Compute the price to NOPAT ratio for both Kohl’s and Walmart.

b. Use Kohl’s and Walmart as comparables, along with the company value to NOPAT ratios from part

a, and then estimate for Target its company intrinsic value, its equity intrinsic value, and its equity intrinsic value per share.

c. Compute the price to net income ratio for both Kohl’s and Walmart.

d. Use Kohl’s and Walmart as comparables, along with the equity to net income ratios from part c, and then estimate for Target its equity intrinsic value and its equity intrinsic value per share.