Goldman Sachs’ List Of Stocks That Hedge & Mutual Funds Love & Hate: 28 Stocks On The Mutual and Hedge Funds Radar

22. Target Corporation (NYSE:TGT)

Number of Hedge Fund Holders In Q2 2024: 52

Category: Shorted by HFs and overweight among mutual funds

Target Corporation (NYSE:TGT) is a discount retailer with close to two thousand stores in the US. This makes it a classic defensive stock that tends to hedge its losses in case of an economic downturn. Target Corporation (NYSE:TGT)’s size also means that the retailer has to ship high product volumes to ensure it can maintain its margins to fund operations. Additionally, the firm is also dependent on consumer spending trends in America, and with inflation dropping, it has seen sizeable tailwinds this year. For instance, Target Corporation (NYSE:TGT)’s shares jumped by 10% in August after its $24.45 billion in Q2 revenue and $2.57 in EPS beat analyst estimates of $25.21 billion and $2.18 on the back of price cuts made to more than 5,000 items. If inflation continues to drop and consumers find more room in their budget for discretionary spending, Target Corporation (NYSE:TGT) could see more tailwinds despite increased cost pressures stemming from high quality goods.

Target Corporation (NYSE:TGT)’s management commented on discretionary spending during its Q2 2024 earnings call. Here is what they said:

“Within our assortment in Q2, we saw notable areas of strength in both discretionary and frequency categories. As Brian highlighted, discretionary trends have been improving for a full year now, and combined discretionary comps were down only slightly in Q2. This momentum was most evident in our apparel assortment, which delivered low single-digit comp growth driven by newness in combination with strong everyday value, both in-stores and online. Comps were led by a performance category in the low double-digits as guests loved our latest designs and unbeatable prices in our All in Motion brand. Women’s apparel saw growth in the low to mid-single-digits with particular strength in our young contemporary owned brand Wild Fable. And a recent relaunch of our intimate and sleepwear brand, Auden, has seen a strong guest reaction out of the gate, offering high quality and comfortable items at compelling price points, like $15 bras and $20 pajama sets.

These results demonstrate the broad-based improvements that we’re seeing in apparel, a trend we are eager to build on in the coming quarters and years.”