5 Best Department Store and Discount Retailer Stocks to Buy

In this article, we will be taking a look at the 5 best department store and discount retailer stocks to buy. To see more of these stocks, you can go directly to see the 10 Best Department Store and Discount Retailer Stocks to Buy.

5. Target Corporation (NYSE:TGT)

Number of Hedge Fund Holders: 48

Target Corporation (NYSE:TGT) is a general merchandise retailer operating in the US. It is based in Minneapolis, Minnesota.

Steven Shemesh, an analyst at RBC Capital, holds an Outperform rating on Target Corporation (NYSE:TGT) shares as of April 21.

Target Corporation (NYSE:TGT) generated revenues of $109,120 million in fiscal 2022, which represents an increase of 2.9% year-over-year. The company’s comparable sales grew by 2.2% over the same period. Analysts on Wall Street see Target Corporation (NYSE:TGT) as a Moderate Buy with 15 Buy ratings and 12 Hold ratings.

Our hedge fund data shows 48 funds long Target Corporation (NYSE:TGT) in the fourth quarter, with a total stake value of $1.7 billion.

Madison Investments, an investment advisor, mentioned Target Corporation (NYSE:TGT) in its first-quarter 2023 investor letter. Here’s what the firm said:

“Target Corporation (NYSE:TGT) reported a solid fourth quarter, exceeding expectations. Same store sales were positive with better-than-expected margins resulting in earnings for the quarter ahead of expectations. At the same time, Target provided guidance for 2023 that was below expectations, which sets them up to meet or exceed expectations after a difficult 2022. Target expects same store sales for 2023 to range from a low single digit decline to a low single digit increase, with operating margins in the 4.5% to 5% range. We continue to view Target as well positioned for long-term growth with its strong owned brand strategy and omnichannel offerings.”

4. Dollar General Corporation (NYSE:DG)

Number of Hedge Fund Holders: 59

Dollar General Corporation (NYSE:DG) is a discount retailer operating in the US. It is based in Goodlettsville, Tennessee.

Analysts at Argus upgraded Dollar General Corporation (NYSE:DG) from Hold to Buy on April 21.

Wall Street analysts have placed an average price target of $241.53 on Dollar General Corporation (NYSE:DG) shares. The shares were trading at $219.44 on April 26. This gives the stock an upside potential of 10.07%.

A total of 59 hedge funds were long Dollar General Corporation (NYSE:DG) in the fourth quarter, with a total stake value of $2.1 billion.

3. Walmart Inc. (NYSE:WMT)

Number of Hedge Fund Holders: 66

Walmart Inc. (NYSE:WMT) is a retail and wholesale giant operating in the US. It is based in Bentonville, Arkansas.

Chuck Grom, an analyst at Gordon Haskett, holds a Buy rating on Walmart Inc. (NYSE:WMT) shares as of April 19.

Walmart Inc. (NYSE:WMT) generated revenues of $162.74 billion in the fourth quarter. This represented an increase of 7.4% year-over-year. Analysts on Wall Street consider the stock to be a Strong Buy.

There were 66 hedge funds long Walmart Inc. (NYSE:WMT) in the fourth quarter. Their total stake value was $4.9 billion.

2. Costco Wholesale Corporation (NASDAQ:COST)

Number of Hedge Fund Holders: 66

Costco Wholesale Corporation (NASDAQ:COST) operates membership warehouses. It is engaged in the consumer staples merchandise retail industry.

Phillip Blee, an analyst at William Blair, initiated coverage of Costco Wholesale Corporation (NASDAQ:COST) shares with an Outperform rating on April 26.

The average price target placed on Costco Wholesale Corporation (NASDAQ:COST) by analysts on Wall Street is $548.17. The shares were trading at $503.17 on April 26. This gives the stock an upside potential of 8.94%.

Out of the 943 hedge funds tracked by Insider Monkey in the fourth quarter, 66 hedge funds were long Costco Wholesale Corporation (NASDAQ:COST). Their total stake value was $3.4 billion.

1. The TJX Companies, Inc. (NYSE:TJX)

Number of Hedge Fund Holders: 69

The TJX Companies, Inc. (NYSE:TJX) is an apparel retail company. It is based in Framingham, Massachusetts.

An Outperform rating was reiterated on The TJX Companies, Inc. (NYSE:TJX) shares on February 23 by Mark Altschwager at Baird.

With 11 Buy ratings, analysts on Wall Street see The TJX Companies, Inc. (NYSE:TJX) as a Strong Buy. They have placed an average price target of $90.73 on the shares, which were trading at $76.84 on April 26. This gives the stock an upside potential of $18.08%.

In total, 69 hedge funds were long The TJX Companies, Inc. (NYSE:TJX) in the fourth quarter, with a total stake value of $2.6 billion.

Artisan Partners, an investment management company, mentioned The TJX Companies, Inc. (NYSE:TJX) in its fourth-quarter 2022 investor letter. Here’s what the firm said:

“Also, shares of The TJX Companies, Inc. (NYSE:TJX), an off-price retailer of apparel and home goods across North America, Europe and Australia, rose on strong Black Friday sales and market share gains as shoppers searched for deals in physical stores. The company showed that it is maintaining margins and beating earnings estimates on strong sales and by selectively raising prices. TJX’s business model is to sell brand name and designer merchandise in limited quantities at every day discounted prices in stores with flexible, low-cost layouts. Its strategy is to tap into shoppers’ psychological need to “treasure hunt,” as the company describes it, to find unique, branded items at deep discounts. TJX buyers opportunistically purchase merchandise from vendors at deep discounts to keep the cost of goods low for stores. As the largest off-price retailer, the company has used its channel power to its advantage in recent months to gain steep discounts on merchandise as other retailers struggle to clear their inventory. We appreciate the company’s inventory management and pricing  prowess. This holding is an example of our broad universe of companies that we consider for the portfolio and one that we believe is well-positioned for the current market environment.”

See also 10 Biggest Discount Store Companies in the World and 13 Best Consumer Staples Dividend Stocks To Buy.