7 Best Department Store Stocks to Buy According to Hedge Funds

3. Target Corporation (NYSE:TGT)

Number of Hedge Fund Holders as of Q2 2024: 52

Target (NYSE:TGT) is an American retail corporation that operates a chain of discount department stores and hypermarkets selling a wide assortment of goods, ranging from clothing and groceries to electronics, sports, entertainment, and other general merchandise. It boasts around 2,000 stores across the United States and plans to open more than 300 stores in the coming decade.

Target (NYSE:TGT) is running on solid fundamentals, with its fiscal second quarter of 2024 earnings showing comparable sales growth of 2%, at the very top end of its guidance range. Its EPS of $2.57 was also well above the high end of its guidance, reflecting more than 42% growth over last year. This growth was driven entirely by traffic, reflecting the combined benefits of the multiple guest-focused initiatives the company outlined in its Financial Community Meeting.

The company’s digital channels and stores both grew in fiscal Q2 of 2024, with high single-digital growth in its digital comps. Its same-day services, led by Target Circle 360 and Drive Up, saw even faster growth, with both growing in the low teens.

After its relaunch in fiscal Q1 2024, the company is seeing continued momentum in its Target Circle loyalty platform. With more than 100 million members, it added more than 2 million new members in fiscal Q2 2024. The company’s aspirations for this platform grow beyond its membership base, as it has redesigned Target Circle with the goal of boosting engagement among existing members. The company boasts a strong market presence, which gives it a significant competitive edge. It ranks third on our list of the 7 best department store stocks to buy according to hedge funds.

Carillon Eagle Growth & Income Fund stated the following regarding Target Corporation (NYSE:TGT) in its Q2 2024 investor letter:

“Target Corporation’s (NYSE:TGT) sales continue to feel the consumer softness in discretionary goods. In addition, while margins are recovering, they are not up to expectations. Encouragingly, sales are sequentially increasing and comparable sales are expected to get easier as Target enters the back half of the year.”