We recently published a list of Jim Cramer Stock Portfolio for Q4: Top 11 Stocks to Buy and Sell. Since Target Corporation (NYSE:TGT) ranks 7th on the list, it deserves a deeper look.
Jim Cramer in a latest program on CNBC talked about the importance of using short-term rallies to your advantage. He said that investors should know when to take the chips off the table.
“The idea that you should buy and hold through both the best of times and worst of times is probably incredibly foolish, with only very few exceptions,” Cramer said.
Cramer said that if the stock you bought is going higher and higher and you keep resisting the urge to take some profits, you won’t make any actual money from these gains if the stock comes down later paring all these profits. This seems straightforward but the idea of buying low and selling high is easier said than done, Cramer said.
“Don’t get carried away by the optimism. Instead, keep your head on straight, check your emotions, focus on long term and think about ringing the register, especially on stocks that might be getting too high,” Cramer added.
For this article we watched several latest programs of Jim Cramer aired on CNBC and picked 10 stocks he’s talking about. We also picked an interesting prediction Cramer made back in 2021 about a stock and saw how it turned out. With each company 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
When asked about Target Corp (NYSE:TGT), Jim Cramer said the retailer’s 3% dividend yield is “quite good” and it had a “very very good quarter.”
Target Corp (NYSE:TGT) recently reported strong Q2 results and analysts are hopeful about the stock amid the upcoming holiday season.
What was so special about the quarter? Target reported a 2.7% year-over-year revenue growth to $25 billion, surpassing estimates. Notably, comparable sales turned positive after four straight quarters of decline, driven by increased customer traffic, which compensated for a drop in the average selling price (ASP) compared to a year ago.
Target Corp (NYSE:TGT) loyalty program, Target Circle, also gained traction, adding 2 million new members in the quarter, bringing the total to 100 million. The company added hundreds of thousands of new cardholders and Target Circle 360 members during its July promotion.
Target Corp (NYSE:TGT) raised its adjusted EPS guidance to between $9.00 and $9.70, signaling a focus on returning to pre-pandemic profitability levels. Analysts expect adjusted EPS to grow faster than revenue, suggesting margin expansion as the company leverages its merchandising strategies, brand portfolio, and loyalty program to boost engagement and sales. By FY26, adjusted EPS is projected to reach $11.37, with a present value of $9.75 when discounted at 8%.
Given the S&P 500’s average earnings growth of 8% over 10 years and a typical P/E range of 15-18, Target Corp (NYSE:TGT), with its improving fundamentals, could justify a P/E of 18-19. This points to a price target of $175-$185, offering roughly 15% upside from current levels.
Diamond Hill Large Cap Strategy stated the following regarding Target Corporation (NYSE:TGT) in its Q2 2024 investor letter:
“Other bottom contributors in Q2 included CarMax, Target Corporation (NYSE:TGT) and ConocoPhillips. US-based mass retailer Target faces concerns about a slowing consumer discretionary spending environment, which weighed on shares in the quarter.”
Overall, Target Corporation (NYSE:TGT) ranks 7th on Insider Monkey’s list titled Jim Cramer Stock Portfolio for Q4: Top 11 Stocks to Buy and Sell. While we acknowledge the potential of Target Corporation (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.
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Disclosure: None. This article is originally published at Insider Monkey.