Investment decisions should be made after a thorough analysis of the company’s previous and current financial experiences to be successful and have a high chance of generating profits. Therefore, as a potential investor, I would avoid investing in the company I have investigated for only one term, even if this period is marked with extraordinary success. The business’s profitability and the demand for services and products are not necessarily stable and can vary depending on poorly controlled external factors, including political landscapes and seasonal trends (Lanbaran et al., 2020). Accurate demand forecasts stem from the analysis of historical sales data, so looking at one term represents a high-risk strategy when it comes to investment opportunity classification. Moreover, the demand for disruptive innovative products can sometimes be high for a short time before the phase of oversaturation, making temporary financial success an extremely misleading source of data. Therefore, making investment decisions based on the company’s one fiscal term in isolation from other reporting periods is fraught with unnecessary risks.
As for the business entities, Target Corporation can be a particularly good investment opportunity, at least in the longer term. Despite sporadic reductions, Target’s share prices are estimated as relatively stable, implying stable dividends (Simply Wall St, 2022). The corporation’s current price-to-earnings ratio is around 12.9, which is within the normal range but exceeds the industry’s average results (Simply Wall St, 2022). This marker implies that investing in Target right now does not represent the best possible solution. However, as per prospective estimates rooted in Target’s historical data and share price dynamics, there is a high chance for growth within the next three years (Simply Wall St, 2022). Considering these forecasts, investing in Target a few months later is a good opportunity with a low degree of uncertainty.
References
Lanbaran, N. M., Celik, E., & Yiğider, M. (2020). Evaluation of investment opportunities with interval-valued fuzzy TOPSIS method. Applied Mathematics and Nonlinear Sciences, 5(1), 461-474. Web.
Simply Wall St. (2022). Is Target Corporation (NYSE:TGT) potentially undervalued? Yahoo. Web.