The retail industry has showcased remarkable resilience and stability despite the macroeconomic headwinds. Factors such as moderated price levels, strength in the labor market, and wage growth have bolstered consumers’ purchasing power, thereby benefiting retail businesses and driving up their stock prices.
Retail behemoths Target Corporation (TGT – Get Rating) and Walmart Inc. (WMT – Get Rating) are both among the largest retail businesses in the US. However, after carefully examining their fundamental aspects, I conclude that WMT might be an ideal buy, while investors might wait for a better entry point in TGT. The reasons supporting this conclusion are explained throughout the article.
As per the latest data from the US Census Bureau, the US overall retail sales last month were up 0.4% from March and up 1.6% year over year. NRF chief economist Jack Kleinhenz added, “Shoppers are being selective and price-sensitive, but we continue to expect that spending will see modest gains through the course of the year.”
Greater internet accessibility and governmental emphasis on digitalization are poised to create attractive opportunities for retail investment in emerging markets.
While TGT has declined 6.8% year-to-date, WMT has gained 3.3% over the same time period. Moreover, TGT has declined 14.9% over the past year, but WMT has gained 16.2% over the same year. TGT closed its last trading session at $138.93, and WMT closed at $146.42.
Here are the reasons why I believe…
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