Is Target Stock Halal?
Target Corporation · TGT · NYSE
Target (TGT) passes our business-activity screen (general-merchandise retail) and the AAOIFI financial-ratio screens we can compute (data as of 2026-05-02): interest-bearing debt and cash are within the 30% limits and interest income is immaterial. We hold it as conditional because Target earns incidental revenue from alcohol, tobacco and lottery sales that it does not disclose separately, so we cannot independently confirm impermissible revenue stays under the 5% limit. Most Shariah screeners treat these categories as within tolerance and require purification of the proportional share — verify against the latest filing and purify accordingly.
Financial data as of 2026-05-02 · Screening basis: AAOIFI · Last reviewed 2026-06-14
Our Analysis
Target is a US general-merchandise retailer, and like its peers the Shariah question is about category mix rather than the act of retailing. Its fiscal 2025 net sales were $104.8 billion, led by Food & beverage ($24.1 billion) and household essentials ($18.0 billion). Within that mix, Target sells alcohol and conventional groceries; the alcohol portion is not separately disclosed, so it must be estimated rather than read off the filings.
One item that is disclosed and worth flagging is Target's 'credit card profit sharing' income of $522 million in fiscal 2025. This is an interest-linked revenue stream from Target's arrangement with TD Bank on the Target-branded card portfolio, and although it is only about half a percent of net sales, it is exactly the kind of interest-derived income that AAOIFI-based screens weigh against their tolerance and that investors purify from dividends.
Despite both the alcohol category and the credit-card profit-sharing income, Target is currently held by SPUS as of June 11, 2026, which means it passes the S&P 500 Shariah Industry Exclusions methodology and the fund's debt-to-market-cap screen at that date. It is not in HLAL, but HLAL's index selects a different constituent set, so absence there is not a contrary verdict. For a Muslim investor, Target currently screens as compliant under the SPUS methodology, with the honest caveats that some impermissible revenue (alcohol, card profit-sharing) exists, dividend purification applies, and status should be re-checked in a live screener.
Business Activity Screen
Target Corporation is a US general-merchandise retailer operating stores and Target.com. Per its fiscal 2025 results (year ended January 31, 2026), total net sales were $104,780 million, of which merchandise sales were $102,717M across categories: Food & beverage $24,136M, Household essentials $18,017M, Hardlines $15,800M, Apparel & accessories $15,737M, Home furnishings & décor $15,608M, Beauty $13,214M, and other $205M. Net sales also include advertising revenue $915M, credit card profit sharing $522M, and other $626M.
Two Shariah-relevant items are factually disclosed in Target's filings. (1) Target sells alcohol and conventional grocery/food categories; alcohol revenue is not separately broken out within the Food & beverage category, so its share is not quantifiable from filings. (2) Target explicitly reports 'credit card profit sharing' income of $522 million in fiscal 2025, an interest-linked revenue stream arising from its arrangement with TD Bank Group on the Target-branded credit/debit card portfolio; this is approximately 0.5% of net sales. Despite the alcohol category and the credit-card profit-sharing income, Target IS currently held by SPUS (33,355 shares as of 2026-06-11), indicating it passes the S&P 500 Shariah Industry Exclusions methodology and debt screen as of that date; it is not in HLAL.
Financial Ratio Screen
| Screen | Value | AAOIFI limit | Result |
|---|---|---|---|
| Interest-bearing debt / market cap | 7.6% | < 30% | Pass |
| Cash + interest-bearing securities / market cap | 5.9% | < 30% | Pass |
| Impermissible income / total revenueInterest income is immaterial (net interest expense $445M, FY2025; 'net other income' $95M is non-interest). The residual screening question is incidental alcohol/tobacco/lottery retail revenue, which Target does not break out — see conditions. | — | < 5% | Pass |
Spot market cap at research date (consider trailing average for borderline names). Data as of 2026-05-02 · thresholds per AAOIFI Shariah standards.
This verdict uses the AAOIFI standard — the most widely used and, at a 30% debt limit, the most conservative mainstream Shariah standard. Interest-bearing debt and interest-bearing securities each stay under 30% of market cap, and impermissible income under 5% of revenue. Other standards (Dow Jones Islamic, S&P Shariah, MSCI Islamic, FTSE Yasaar) use ~33% limits or screen against total assets, so a borderline company can be rated differently by each. How we screen & why screeners disagree →
How Target screens across Shariah standards
All three mainstream bases below reach the same conclusion for this company.
| Standard | Debt | Cash & interest securities | Limit / basis | Result |
|---|---|---|---|---|
| AAOIFI (our standard) | 7.6% | 5.9% | < 30% of market cap | Pass |
| Dow Jones Islamic / S&P Shariah thresholdDow Jones and S&P apply this limit against a trailing 24–36-month average market cap; shown here on the same point-in-time market cap for comparison. | 7.6% | 5.9% | < 33% of market cap | Pass |
| MSCI Islamic / FTSE Yasaar basisTotal-assets denominator. MSCI/FTSE also apply entry/exit buffers and a receivables screen we do not reproduce. | 26.6% | 6.1% | < 33.33% of total assets | Pass |
HalalWallet computation reproducing each standard's threshold and denominator from public filings (balance sheet as of 2026-05-02) — not the providers' licensed index determinations, which can differ. Debt is interest-bearing borrowings (operating leases excluded). The impermissible-income screen (< 5% of revenue) is common to all of these standards and is shown in the ratio table above. Dow Jones and S&P apply their limit against a trailing 24–36-month average market cap; MSCI and FTSE add entry/exit buffers and a receivables screen. Full methodology →
Conditions
Target's core business (general retail) is permissible and its financial ratios are within AAOIFI limits, but it earns incidental revenue from alcohol, tobacco and lottery sales that is not separately broken out in its filings. Treat as conditional: confirm impermissible revenue remains under the 5% AAOIFI limit (or rely on a screener that estimates it), and purify the proportional share of dividends.
Scholars' & Screeners' Positions
Published positions, cited as stated. Screeners can reach different conclusions on the same company because of ratio timing and methodology differences — we report the disagreement rather than flatten it.
What to do instead
You don't have to choose between investing and your values — screened alternatives exist for nearly every position.
Related guides
Consider Consulting an Islamic Scholar
Major whether Target Corporation is halal decisions often involve nuances that vary by scholarly opinion and personal circumstance. While HalalWallet provides educational comparisons and tools, we are not scholars or financial advisors. For personal guidance on Shariah compliance, consider speaking with a qualified Islamic scholar, your local imam, or a Shariah-certified financial advisor familiar with your situation.
Important: HalalWallet is an educational comparison platform. We do not provide financial, legal, or religious advice.
Product structures and Shariah-compliance oversight vary by provider. Before applying:
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Frequently Asked Questions
Sources and review process
This page is reviewed against HalalWallet editorial standards and source documentation.
Reviewed by: HalalWallet Editorial Team
Last reviewed: 2026-06-01
- TGT latest quarterly filing (balance sheet 2026-05-02)
- AAOIFI Shariah Standards
- Target FY2025 10-K, Item 8 financial statements (company IR)
- Target Q4/Full-Year 2025 earnings release (company IR PDF)
- SPUS holdings (SP Funds)
- HLAL Schedule of Investments 2026-02-28 (SEC EDGAR)
- HalalWallet Methodology
- Editorial Policy
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Editorial Team, HalalWallet
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