We recently published a list of Top 8 Discount Stores Stocks For 2025. In this article, we are going to take a look at where Target Corporation (NYSE:TGT) stands against other top discount stores stocks for 2025.
When Donald Trump announced tariffs on China, Canada, and Mexico, stocks of most of the retail stores went down. The tariffs are likely to increase inflation and hurt the country’s economy if they continue for the duration of Trump’s term.
For investors, it is vital to keep an eye on companies that are either taking a hit on revenue directly through tariffs or losing popularity among consumers in the foreign countries involved. Some companies can take a financial hit better than others. Take for instance a company that makes branded clothing. Such a company can raise the prices of its products and its loyal consumers won’t mind. Now imagine a retail store that sells the same product. When consumers see a 10% rise in the price of the product, they blame the store, not the brand. It is the retail store that loses value in this case and that’s why the tariffs hurt them, even if they aren’t directly exposed to China.
We decided to take a look at 8 discount stores as investments in 2025. To come up with our list of 8 discount stores as investments in 2025, we only considered stocks with a market cap of at least $2 billion.
A woman purchasing groceries at a Target store, with a cart full of products.
Target Corporation (NYSE:TGT)
Target Corporation (NYSE:TGT) is a general merchandise retailer that provides jewelry, apparel, shoes, beauty & personal care, pet supplies, and other products. The company supplies its products through digital channels and its stores. The stock is down nearly 4% in the last five trading days.
Target (NYSE:TGT) shareholders were caught by surprise in the third quarter when the company missed analyst estimates, a rare occurrence for the retail giant. The stock crashed over 22% as a result. The main reason for the poor performance was lower consumer spending which was further exacerbated by weakening gross margins. The stock has been slowly recovering since then, anticipating the holiday season results which usually come in good for the company.
The firm is expected to receive a significant boost when it announces the Q4 result in early March. Already released numbers show the company exceeded sales expectations, with record sales on Cyber Monday and Black Friday. The earnings will confirm if the people were indeed spending money, unlike Q3. Chances are they were and that’s why the stock is inching up slowly.
Target (NYSE:TGT) is a strong company and due to its recent struggles is trading at just over 14 times forward earnings while the median forward PE for the sector is 18.39. There is value to be had here as people try to get in to play the December quarter earnings.
Overall, TGT ranks 2nd on our list of top discount stores stocks for 2025. While we acknowledge the potential of TGT as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as TGT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
