7 Cheap Reliable Stocks to Invest In

3. Target Corporation (NYSE:TGT)

Forward P/E: 16.31

Analysts’ Upside Potential: 16.08%

Number of Hedge Fund Holders: 52

Target (NYSE:TGT) is a popular American retail corporation that operates a chain of discount department stores and hypermarkets with a comprehensive list of offerings, ranging from clothing and groceries to electronics, entertainment, sports, and other general merchandise. It currently operates around 2,000 stores across the country, with expansion plans to add 300 new stores to the chain in the coming decade. It opened four new stores in Florida, South Carolina, and Texas in August alone.

The stock currently trades at a forward P/E of 16.31 at a 8.94% discount to its sector. It sports a consensus Buy rating among analysts, with its current average price target of $155.07 implying an upside of 16.08% from current levels. The company is focusing on strong execution and retail fundamentals. It is expanding its operating margin rate, intending to move beyond its pre-pandemic annual rate of 6%. In addition, Target (NYSE:TGT) is prioritizing continued disciplined capital deployment.

Target (NYSE:TGT) is running on strong fundamentals. Its Q2 comparable sales grew by 2% at the top end of its guidance range. Its EPS of $2.57 was also higher than its guidance, representing more than 42% growth from 2023. This growth was driven primarily by traffic, highlighting the benefits of its several guest-focused initiatives.

In addition, Target’s (NYSE:TGT) store and digital channels also experienced growth in Q2. It experienced single-digital growth in its digital comps, and even faster growth in same-day services led by Target Circle 360 and Drive Up. Target’s (NYSE:TGT) same-day services give it a competitive advantage, accounting for over two-thirds of its digital sales. Drive Up remains the most significant contributor, generating sales of more than $2 billion in Q2 and more than $4 billion so far in 2024.

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.”