We recently published a list of Jim Cramer’s Latest Calls: 10 Stocks to Buy and Sell Now. Since Target Corp (NYSE:TGT) ranks 8th on the list, it deserves a deeper look.
Jim Cramer in a recent program on CNBC yet again talked about the importance of investing in individual stocks and said with discipline and patience beginner investors can beat the market by picking solid stocks with strong fundamentals.
“If you are willing to put in the work, regular people can trounce the averages as long as you are disciplined and you follow the rules,” Cramer said.
Talking about his stock-picking process, Cramer said that he likes to “start” hunting for stocks by going through the list of stocks making new highs. This is a good start, according to Cramer, because a lot of times momentum keeps pushing the same stocks higher and higher unless something fundamentally changes. Cramer said he does not recommend buying stocks when they are trading at new highs. Instead, he waits for a pullback.
“New high list is not a shopping list it’s an inspirational list. You keep an eye on those names and then wait for them to come down before you pull the trigger,” Cramer said.
Cramer said that you should only pile into stocks on a pullback if you believe they will rebound for reasons “unrelated to the broader market.”
For this article, we picked 10 key stocks Jim Cramer is talking about during his programs these days. With each stock, we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Target Corp (NYSE:TGT)
Number of Hedge Fund Investors: 52
Jim Cramer quoted a CNBC research report which said Target Corp (NYSE:TGT) has historically performed well when the Fed starts cutting rates. Cramer said the company has got a “terrific” turnaround story.
Cramer highlighted that Target recently reported its first positive same-store sales growth since 2022 driven by “higher traffic, not higher price.”
“I think Target Corp (NYSE:TGT) is doing a lot of things right – controlling costs, growing margins, stopping theft and cutting prices to bring back customers.”
Wall Street expects Target to generate $106.9 billion in revenue this year, with earnings of $9.50 per share, translating to a price-to-earnings (P/E) ratio of 16.16. This is notably below the sector median, signaling potential value. Looking ahead to next year, forecasts suggest revenue could rise to $110.2 billion, with earnings reaching $10.45 per share, bringing the forward P/E down to 14.69.
With interest rate cuts now started and inflation on a downward trajectory, Target Corp (NYSE:TGT) is expected to see more traffic at its stores in the months ahead, especially during the upcoming holiday season.
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.”
Overall, Target Corp (NYSE:TGT) ranks 8th on Insider Monkey’s list titled Jim Cramer’s Latest Calls: 10 Stocks to Buy and Sell Now. While we acknowledge the potential of Target Corp (NYSE:TGT), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TGT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
